Orpheus among two sites that are music to investor ears
This property for sale at 59-81 Station Rd, Otahuhu, encompasses the former Orpheus Theatre building.
Two substantial Otahuhu properties with retail shops at ground level and accommodation businesses on the first floor levels above, are two of the larger freehold properties to go under the hammer in Bayleys’ final Total Property commercial and industrial auction for the year.
Located in Station Rd and Great South Rd, both properties are earning over $300,000 per annum and have been owned for many years by the one vendor who is selling up to move to Australia.
They are being marketed by Ben Bayley and Dave Stanley of Bayleys Manukau and will be go under the hammer along with close to 40 other properties in Bayleys’ central Auckland auction room on December 3.
The first of the two, a 1934 sq m freehold site at 59-81 Station Rd encompasses the former Orpheus Theatre building.
“It is producing $332,000 in net annual rental income and is expected to sell at a high yield,” says Ben Bayley.
The property has six fully leased ground level shops totalling 500 sq m which are generating annual net rental income of $153,897.
The 1905 sq m 31-room Wembley Guest House on two levels above earns $178,000 per annum in rent based on figures supplied for the last financial year. There is also rear warehousing of 331 sq m behind the retail tenancies.
“This property offers a savvy purchaser the chance to benefit from its very good cash flow over the next few years and the opportunity to redevelop the site at some stage,” says Bayley. “It is zoned Mixed Use under the proposed Unitary Plan which opens up all sorts of possibilities for the next owner.”
The building opened as the Orpheus Theatre in 1925 which was Otahuhu's second cinema following the opening of the Gaiety Theatre, in Great South Road, a year earlier. The Gaiety closed in 1967 but the Orpheus - known as the New Orpheus since 1955 - survived almost another two decades before it also closed in 1986.
Bayley says the current owner has maintained the building’s character look and has attracted a good range of retail tenants. The biggest occupant is the Get Fresh Vege and Spices Centre. Other tenants include a superette, butcher, takeaway, lunch bar and a dressmaker. Four of the tenants are on six year leases, with the other two leases of two years duration. The Wesley Guest House accommodation comprises a mix of one and two bedroom units rented out at between $140 and $240 a week,
The property is on the corner of main arterial Station Rd with Moa St on the fringe of the Otahuhu commercial centre. Surrounding properties largely comprise low rise commercial and industrial buildings built in the 1960s, as well as residential housing.
The second Otahuhu property, at 32-34 Great South Rd, comprises a mix of retail and guest house accommodation earning rental income of $306,000 per annum. Located on a prominent 1390 sq m site on the corner with Hokonui Rd, the two-level 978 sq m building was constructed in the 1960s with additions made 10 years ago.
The building’s upper level houses a 27-room guest accommodation business trading as Great South Lodge with four ground floor retail tenancies fronting Great South Rd and the corner with Hokonui Rd.
The property at 32-34 Great South Rd, Otahuhu, comprises a mix of retail and guest house accommodation.
The property has significant amount of on-site car parking with angled bays in front of the retail units and further parking for lodge residents and visitors in an internal courtyard accessed off Hokonui Rd.
“This is a modern, well presented property situated on a main road with an IEP [initial evaluation procedure] seismic rating of 98 per cent of New Building Standard, and represents a good long-term investment opportunity,” says Stanley. “It is an excellent cash flow generator and like the Station Rd property is expected to sell at a high yield.”
The four retail tenancies, which range in size from 73 sq m to 79 sq m comprise a lunch bar, two takeaway outlets and a dairy, and are producing net annual rental income of $63,776.
The 695 sq m lodge provides predominantly one room accommodation with some double rooms rented at $175 to $225 a week - plus a 3 bedroom flat generating $420 a week.
Great South Lodge is producing net annual income of approximately $242,319 based on a current 95 per cent occupancy rate.
Stanley says a new owner could run the guest house as a ‘hands on’ operator to maximize the property’s return or treat it as a passive investment and leave it to the current manager who is running the lodge at close to full occupancy.
Stanley says the surrounding area mostly comprises a mixture of commercial and industrial buildings of a similar age that are predominantly occupied by small and medium sized businesses.
Ben Bayley of Bayleys.