Hastings Bunnings land and buildings
Bunnings Hastings sits on 7178sq m of land at the corner of Market St North and St Aubyn St. Photo / Supplied
One of Hawke’s Bay’s largest retail land and building sites, the Hastings Bunnings Store, is for sale.
The 4600sq m store will be sold via a tender process — closing on March 9 — through Bayleys Hawke’s Bay salespeople Paul Garland and Rollo Vavasour.
The building at the corner of Market St North and St Aubyn St, sits on some 7178sq m of land.
The freehold property, which features in Bayleys’ latest Total Property magazine, comprises 102 tar-sealed car parks and overlooks the main arterial route through the city.
Garland says the building, initially home to the Hastings Warehouse, was constructed in 1994. A goods unloading extension was added a year later, and new internal walls installed in 2014.
The building was refurbished last year, just ahead of home improvements and outdoor living retailer Bunnings taking up its tenancy.
“Bunnings has a new five-year lease on the property, earning a net income of $450,000 per annum. This runs through to 2021, with two further five-year rights of renewal, including annual rental increases of 2.5 per cent. As sole tenant, Bunnings pays outgoings such as council rates, insurance and water charges,” says Garland.
The building was constructed with a combination of pre-cast concrete panels topped with profiled steel cladding — providing an Initial Evaluation Procedure (IEP) rating of 75 per cent.
The end bay has a mezzanine level containing offices and staff amenities such as a kitchenette and lunchroom, as well as toilets.
The property has a rateable value of $4.62m — comprising $2.51m for the land and $2.11m for the building, which is zoned commercial 8C.
Garland points out that the building sits alongside other large format retail outlets, such as The Warehouse, Mitre 10 Mega, Farmers, K-Mart, and Harvey Norman.
The 4600sq m store, initially home to the Hastings Warehouse, was constructed in 1994. Photo / Supplied
Vavasour says Bunnings was originally attracted to the site by the 174m road frontage on to Market St North and the fact 16,000 vehicles pass by the entrance gates on a daily basis.
“The investment scenario of having a very strong tenant on long lease terms, combined with a modern building in a good part of town from a retailing perspective, means the Market St North/St Aubyn St premises will be an attractive opportunity for passive investors,” Vavasour says.
The latest retail real estate market analysis by Hawke’s Bay property valuations firm Turley & Co reports that Bunnings’ relocation to the site is part of a substantial exodus of large format retailers to the Park Megacentre precinct.
“Considerable vacant space (in the greater Park Megacentre precinct) has been backfilled by a handful of new and existing national and Australasian retailers.
“ These retailers are positioning themselves for competitive advantage and future growth, but also potentially drawing some consumers away from the high streets.”
Garland sees a strong appetite for large investment premises in Hawke’s Bay’s retail sector — with sizable funds actively looking to come into the region from Auckland when suitable properties were placed on the market.
“Spearheading this trend was the sale last year of The Warehouse Hastings property which sold for $17.56m for a yield of 6.53 per cent to an Auckland investor.
“This was the most substantial commercial property transaction in the province in 2016,” Garland says.
“Also notable in the Bay’s investment property category was the sale of Edgewater Motor lodge in Marine Parade which was sold by Bayleys for $3.75m to a Napier investor for a 6 per cent yield. Interestingly though, several of the under-bidders were from Auckland.”
“Auckland’s quality commercial and well-tenanted industrial-classed stock is selling at yields below or around five per cent.
“So it is likely the buyer for the Market St North/St Aubyn St property will be somebody searching for a higher yield opportunity than can be achieved in the City of Sails.”