Paihia properties come with 14 tenancies

5:00 AM Saturday November 19, 2016 True Commercial

Paihia retailers are benefiting substantially from a big growth in tourism over recent years.

Neighbouring Paihia properties, for sale on a prime corner site adjacent to the town’s wharf, come fully leased with 14 tenancies.

Located at 9 Williams Rd and 68 Marsden Rd, the properties generate total net annual rental income of $684,628, says James Chan of Bayleys International division.

Split into two titles, and comprising four buildings on 1124sq m of land, the properties are featured in Bayleys’ Total Property portfolio.

Tenders — for either one or both of the properties — can be submitted up until December 2, says Chan.

He is selling them with colleagues Matt Lee, Bayleys International division, and Steve Orr, Bayleys Warkworth.

“Each title has seven retail tenancies. Many of the occupants have made a long-term commitment to the properties, with an average weighted lease term (WALT) of 7.35 years for 9 Williams Rd and just over six years for 68 Marsden Rd,” says Chan.

“This sort of long lease profile is a reflection of the strength of what is arguably the best location in Paihia’s commercial precinct. The site receives an exceptional level of exposure from its corner position on the town’s main retail street (Williams Rd) with frontage also to State Highway 11 (Marsden Rd), the main coastal route to Kerikeri and linking to Waitangi.”

The two titles are separated by Paihia Lane accessed off Williams Rd which also run behind 9 Williams Rd.

The largest tenant in this property is Jimmy Jack's Rib Shack which occupies just over half of 9 Williams Rd and took a new lease for a further 10 years in 2015.

“This is one of Paihia’s most popular and busiest restaurants and has been awarded a certificate of excellence from Trip Advisor for its consistently great reviews from travellers,” says Lee.

“Rip Curl, a major Australian based designer, manufacturer and retailer of surfing and beach sportswear and accompanying products, is the next largest tenant occupying 146sq m of space. It has a five-year lease from August 2015 with annual rental increases of three per cent. Founded in 1969, Rip Curl is considered one of the ‘Big Three’ of the surf industry alongside Quiksilver and Billabong.”

Paihia Retail RESIZED.jpg

The shops adjacent to Paihia Wharf attract both domestic visitors and overseas tourists.

Other smaller tenants at 9 Williams Rd include Letz Café which has a quirky, nautical-themed fit-out, Avo Sushi and Noodle Bar which are on five to 12 year leases expiring in 2021 and 2022. This property is producing net annual rental income of $350,014 which includes a rental underwrite for 12 months on two small internal units with frontage onto Paihia Lanes.

The other property has frontage onto both Marsden Rd and Williams Rd. It is fully leased to a range of mostly smaller tenancies ranging from 10sq m for the Bay of Islands Information Centre to 119sq m for Sauce, another popular restaurant offering customers the opportunity to design their own pizzas and stocking a wide range of craft beer and other beverages.

Other tenants include three gift and souvenir shops, Vinnies Takeaways and Cellini’s ice cream and coffee shop. Lease terms range from five to 15 years, expiring from 2021 to 2026. This property is generating net annual rental income of $330,613.

Orr says Paihia retailers are benefiting substantially from a big growth in tourism over recent years.

“Most major cruise companies now include Paihia in their itineraries. Fifty one cruise ship arrivals are expected in the 2016/17 season, estimated to bring close to 95,000 visitors to Paihia.”

Bay of Islands Airport near Kerikeri which services Paihia was upgraded in 2014/2015 to accommodate additional flights of larger 50-seat aircraft, with a record 87,000 people flying into or out of the airport last year. Up to five scheduled passenger flights a day now connect with Auckland and planning is currently underway to expand and modernise the terminal building and its facilities.

“A close partnership between Air New Zealand and the Bay of Islands’ tourism and hospitality marketing and promotions organisation is also having a positive effect and air traffic is expected to continue growing by about 20 per cent a year for the foreseeable future,” says Orr.

“Paihia is a hub for the many tourism activities in and around the Bay of Islands many of which are focused on the wharf across the road from these properties."