Gisborne red shed should be hot property

5:00 AM Saturday April 18, 2015 Colin Taylor

The Warehouse is for sale at 80 Customhouse St, Gisborne.

The land and building occupied by Gisborne’s The Warehouse store have been placed on the market with a 10 year leaseback arrangement in place to the ‘red shed’ retailer.

The property, at 80 Customhouse St, is being marketed exclusively for sale by Peter Herdson and John Green of Colliers International’s capital markets team, along with Mark Brunton from the agency’s Hamilton office. It is for sale by deadline private treaty closing on April 30 unless it is sold before the deadline.

"This property offers investors a very strong tenant covenant, with a lease to New Zealand’s largest non-food retailer," Herdson says.

Fiona Shilton, general manager property at The Warehouse, says the sale will allow the company to continue its strategy of reinvesting in its core retail business, while retaining the store on a long-term lease as part of its national network of stores.

The Gisborne Warehouse store is on a freehold 1.9 ha site near the Poverty Bay waterfront on the south eastern edge of the city centre.

The lease to The Warehouse Ltd, which will commence on settlement, will generate $1,104,430 a year in net passing income. The Warehouse will have the right to renew the initial term for eight further terms of three years each, taking the lease through to 2049 if all rights of renewal are exercised. Potential income growth is also on offer through regular rent reviews.

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Entrance level view of The Warehouse in Gisborne.

The 7275 sq m building was purpose-built for The Warehouse in 2010 and is rated at 100 per cent of new building standard. It has a high ratio of on-site car parking with 279 spaces.

Brunton says the store is a fairly typical Warehouse with most of the ground floor having high stud retail space. The building also accommodates a stock room, garden centre and office and staff amenities.

The property covers a large land holding with a primary frontage to Customhouse Street. Secondary access is provided off Reads Quay and Pitt Street.

“This is an excellent location for bulk retail, on the fringe of Gisborne’s central business district,” Brunton says. “It is just two blocks away from the main retail strip of Gladstone Rd, and is within an established commercial hub with other major businesses and retailers nearby.”

He says The Warehouse makes an ideal commercial tenant. "It is well-established, has 92 stores throughout New Zealand and has plans for further growth.”

Green says the property represents a desirable long term, income-generating investment asset with the tenant responsible for all outgoings associated with the premises under the terms of the lease.

"It offers exceptional investment security backed by one of New Zealand's most successful home-grown companies. Add a new building and a prime central city land holding to the mix and there are all the makings of an ideal passive, long-term investment.”

Green says he and his colleagues expect to receive inquiries from a range of local and national buyers including individuals, syndicates and property funds.

Nearby occupiers include Warehouse Stationery, Spark, Liquorland and Piko Piko Organic Enterprises.

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John Green (left), & Peter Herdson, Colliers International (right).