Kelston retail units ticks boxes for first time buyers
Elevated view 4038 Great North Rd, Kelston.
Five tenanted retail units in a new convenience shopping centre at 4038 Great North Rd, in Kelston, West Auckland, are for sale by auction.
The freehold unit-titled investment properties are being marketed by Deborah Dowling, Charlie Oscroft and Shoneet Chand of Colliers International and will go under the hammer individually at 11am on November 5 at the agency’s auction room at 151 Queen St, in the Auckland CBD, unless they are sold before auction day.
“The units all have new long leases, with initial terms of between eight and fifteen years, with further rights of renewal and rent reviews built in,” Dowling says. “They are occupied by Arum Café, Bruce Lee Sushi, Pita Pit, Snap Fitness and Aroha Thai Restaurant.”
Dowling says the centre has just been completed and houses a total of six retail tenancies surrounding a central parking area.
“It benefits from a highly visible position on Great North Rd, one of the major arterial routes through fast-growing West Auckland,” she says.
“With the expansion of West Auckland as a busy residential and business precinct, retailers in this centre have the advantages of occupying a strategic position within the local area.”
Oscroft says annual net rentals on the units range from $29,450 to $126,750. “The properties sit within a popular price bracket for individual investors,” he says. “Retail properties are continually in demand among investors owing to their easily understood fundamentals, and the popularity of this asset class has increased further as bank deposit rates have fallen.
“With the low borrowing rates that are available, we are seeing many first-time buyers viewing the retail property investment market as a way to generate higher returns than those available from cash deposits.”
Chand says that the long-term leases to national and international tenants with rental growth built into the terms make the units sound, bankable investment assets.
“For the first-time commercial investor, these units tick all the boxes and constitute easy to manage, hassle-free investments.”
“These properties would be ideal for people seeking to diversify from residential into commercial property with income-generating holdings that require a minimal capital outlay.”
The centre comprises a two level building constructed to 100 per cent of earthquake code, surrounding 50 car parks. The building is constructed of pre-cast concrete slab with glazed frontages providing excellent natural light to the units. The individual properties range in size from 67 sq m to 390 sq m, with the largest unit occupied by Snap Fitness.
Dowling says the developer is a reputable operator based in Auckland with the experience to know what sort of combination of retailers and services works well within a suburban convenience centre.
Oscroft says the centre caters to a fast growing residential area with further significant population growth forecast for nearby suburbs.
“As a result, the new centre looks set to capture good customer numbers into the future,” he says. “It was completely tenanted before construction even begun which shows the location is attractive to convenience retailers.”
Chand says the complex was designed to provide a very good visual profile for the occupiers to traffic passing along Great North Rd, which connects several of West Auckland’s burgeoning suburbs.
“Suburbs in the West such as Avondale and Kelston are experiencing population growth as increasing house prices force buyers further out of the central city. This is spurring on local business growth as retailers and service providers meet the demand coming from the increasing local resident base.”
Dowling says the Auckland Council’s plan states that the nearby western township hub of New Lynn will, by 2030, be capable of attracting and maintaining a population of 20,000 residents and 14,000 workers.
“The completion of the transport interchange in 2010 was the country's largest-ever public transport infrastructure investment and provided a tremendous boost to West Auckland,” she says.
Several other current and planned property and transport-related initiatives will pave the way to the area becoming an important regional town centre. These include a $30 million extension of LynnMall, a major, mixed-use ‘transit oriented development’ around the transport interchange and significant housing developments.
Charlie Oscroft (left), Deborah Dowling (centre), and Shoneet Chand (right) of Colliers.