Foursome ideal for shop shoppers

6:33 PM Friday April 13, 2018 Colin Taylor

The retail property for sale at 252-254 Broadway, Newmarket, is leased to Nike and Rodd & Gun. Photo / Supplied

Four Greater Auckland properties in Newmarket, Mt Albert, Meadowbank and Papatoetoe, that are featured in Bayleys’ latest Total Property portfolio publication, should attract a range of prospective buyers from the retail investment property sector. 

Heading the retail foursome is a property earning over half-a-million dollars annually from two international tenants on Broadway, Newmarket, which is for sale by tender, closing at 4pm on Thursday May 17.

The other three retail properties in Dorchester St, Meadowbank; Sainsbury Rd, Mt Albert; and St George Street, Papatoetoe - are being marketed for individual sale at an auction commencing at 11am at Bayleys House, Gaunt St, in Auckland Wynyard Quarter on Wednesday May 16. 

Agent Ed Donald who is marketing the freehold standalone property at 252-254 Broadway, says it has 746sq m of lettable space on 362sq m of land; and is divided into two retail units that are leased to sportswear giant Nike and men's clothing chain Rodd & Gunn.

Nike’s lease on 217sq m runs until August 2022 and generates $235,318 a year in net rent; while Rodd & Gunn’s lease on 529sq m over two levels runs until February 2022, with two four-year rights of renewal, and generates $325,000 in gross annual rent.

“Both tenants are established international brands and enjoy high levels of custom,” Donald says. “Broadway is a popular retail destination and the property with a wide street frontage is exposed to heavy foot traffic.”

Donald says Broadway as a high-end retail zone benefits from having a large working population in the immediate area of 20,000 employees and is well-patronised by residents of Newmarket’s affluent neighbouring suburbs like Remuera, Epsom and Parnell. 

“Broadway also has regular rail and bus services and is situated close to Southern Motorway on-ramps.”

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In Meadowbank a property at 2-4 Dorchester St is leased to a superette and liquor store. Photo / Supplied

He anticipates the property will experience significant flow-on effects from Scentre Group’s $790m makeover and extension of the neighbouring 277 Westfield mall. 

“Westfield Newmarket is expected to reopen at the end of this year, or early next year, with tenants to include Auckland’s first David Jones department store, a new format Farmers, Event Cinemas and more than 200 specialty stores and food and beverage outlets.

“The mall’s upgrade will be transformative for Newmarket and is expected to boost the values of retail properties in the area.

"Although other sectors, such as industrial, are seen to be more popular with buyers, strip retail still offers significant value,” Donald says. 

“Successful retail hubs, such as found in Broadway, deliver shopping environments that reflects their local markets. Locations that have a good diversity of brands and are easily accessible will always have value to shoppers - and to property investors.

"Unlike many other asset classes, retail can be easy to reposition and find new tenants if the fundamentals of the property are sound." 

Bayleys agents James Were and Scott Kirk are marketing a freehold property at 2-4 Dorchester Street, Meadowbank, which comprises two 90sq m recently- refurbished retail units, on 339sq m of land. 

 “The units are occupied by a superette and a liquor store paying combined net rent of $64,496 a year plus GST and are leased until February 2024, with eight-year rights of renewal and rent reviews every two years,” Were says. 

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The property at 7/55 Sainsbury Rd, Mt Albert, in tenanted by St Lukes Food Market. Photo / Supplied

He says the property is in a high-profile and popular retail hub on the corner of Dorchester St and St Johns Rd; and is flanked on either side by Italian restaurant Portofino and takeaway outlet Bamboo Kitchen.

“The retail strip is a few minutes’ drive from Meadowbank Train Station and is well serviced by public transport,” Kirk says. “A new owner will have scope to further development of the property, with the Business – Neighbourhood Centre zoning typically permitting buildings of up three storeys high and residential use on the upper floors.”

Over in Mt Albert, retail Unit 7,55 Sainsbury Rd, is for sale through sales agents Janak Darji, Amy Weng and Nicolas Ching.

Ching says the unit has 104sq m of floor space and sits within the Sainsbury Retail Centre, forming part of St Lukes Business Park which benefits from high visibility to passing traffic.  

“The property is leased to Sri Sai Ram Enterprises, trading under the name St Lukes Food Market, until June 2022, with two five-year rights of renewal; and generates net rental income of $45,000 a year plus GST and outgoings,” Ching says. 

"Sainsbury Retail Centre services the local community with a variety of convenience shops and a popular childcare centre. There is parking at the complex where there are several covered spaces directly outside each shop, plus basement parking for customers and staff accessible from the side of the building."

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Papatoetoe Roast and Pasifika Pawnbroker, occupy two units each at 45 St George Street, Papatoetoe. Photo / Supplied

Darji says the property would suit entry-level commercial property buyers looking to secure a modern retail investment as well as seasoned investors looking to diversify their portfolio.

South of Auckland, in Papatoetoe, a freehold standalone property of four retail units at 45 St George St is being marketed by Quinn Ngo and Matt Lee along with Darji. 

Lee says the split-risk investment property, with a combined floor space of 200sq m on 228sq m of land, earns total net rent of $44,869 a year plus GST.

“It’s in a busy retail precinct undergoing massive redevelopment,” he says. “The tenants, takeaway outlet Papatoetoe Roast and pawnbroking chain Pasifika Pawnbroker, occupy two units each, and have recently signed new leases of three and two-years lease respectively with options to renew.”   

“The possibility of splitting the property into four separate tenancies will be of interest to investors looking for add-value potential,” Lee says. 

“Panuku Development Auckland is driving the renewal of the two-hectare Old Papatoetoe mall, on the southern side of St George Street. 

“The redevelopment project will transform the mall area into a new plaza space and establish new retail and food and beverage outlets. It’s also anticipated the refreshed mall will become home to a medical and health hub.” 

Other components of the redevelopment include the upgrade and expansion of Papatoetoe New World supermarket and the reconfiguration of the car park to make it more pedestrian-friendly.