Papakurua big bulk retail complex for auction
The large modern bulk retail complex at 2 and 6 Railway St West in central Papakura.
A large modern bulk retail complex in central Papakura which is producing net annual rental income of nearly half a million dollars is one of the larger commercial and industrial properties being put up for auction later this month as part of Bayleys’ Total Property portfolio.
Located on a 6319 sq m site at 2 and 6 Railway Street West, Papakura, the fully leased freehold property comprises two buildings developed in the mid 2000s and totalling 3118 sq m, one of which accommodates three tenants while the other is occupied by the remaining four tenancies. The property is being marketed as one lot by Peter Migounoff and Piyush Kumar, Bayleys South Auckland and is among 20 Total Property offerings which will be auctioned on May 20, unless sold earlier by negotiation.
“In my view, it’s the best, most modern retail complex in Papakura and was built to a high standard having been recently assessed as having an A-plus seismic rating,” says Migounoff. “The property’s multiple, mostly national retail-branded, tenants provide a substantial rental cash flow of $497,573 per annum and the high profile location ensures massive exposure for them..
“The property is strategically positioned in Papakura’s central business district in an area that is dominated by strip retail with neighbouring tenancies including a Countdown Supermarket located directly opposite. The Papakura train station, the region’s third busiest after Auckland and Newmarket, is on the other side of the property.”
The largest of the property’s seven tenancies is a 662 sq m Noel Leeming bulk retail outlet. The national retailer, which is now wholly owned by The Warehouse Group, is one of the property’s original anchor tenants having been there since 2004. It has exercised the first of three rights of renewal following its initial six year lease. Noel Leeming shares one building with a 587 sq m Number 1 Shoe store, which has been there since 2005 and has exercised a six year right of renewal; and a 450 sq m No 1 Mart which commenced a four year lease in July last year and has two four-year rights of renewal.
One of the centre’s other original occupants Brandy’s Cafe is located in a prime corner position in the other building, directly opposite a pedestrian crossing which leads to and from the Countdown supermarket. Its initial lease of its 151 sq m premises was for nine years from 2004 and has been extended for another nine years through until mid 2022. Migounoff says the cafe benefits from high volumes of pedestrian traffic past its front door and makes the most of this by opening for dinner as well as during the day.
Another tenant in the building is a 355 sq m Liquorland premises which has renewed its six year lease from 2005 for another six years. Others are a 516 sq m Cash Converters store and Ray White Real Estate outlet which are on relatively new leases running for six and eight years with rights of renewal.
Migonouff says Ray White took over a 435 sq m tenancy from the Housing Corporation and has fitted it out to high standard for use as its flagship premises and auction rooms for the Papakura area.
Kumar says the two buildings are surrounded by 68 common car parks, which provide plenty of customer parking and are on two separate titles. “This gives the next owner the flexibility of being able to sell one or both buildings individually at some stage in the future. In the meantime, the property is providing an excellent spread of risk across a range of lease expiries in 2017, 2018, 2020, 2021and 2022, with right of renewals on top of that. The fact that a number of the tenants have chosen to exercise their first right of renewal suggests that the location is working well for them.”
Kumar says the property’s surrounding catchment areas is a growing one which will expand further as Papakura benefits from the Auckland Housing Accord’s Special Housing Areas. “There are thousands of residential sections planed all around Papakura and dwellings already underway. There are also large blocks of land with a Future Urban zoning under the Proposed Auckland Unitary Plan which are likely to be developed for residential use longer term which will further expand the customer base for Papakura retailers.”
Peter Migounoff (left), & Piyush Kumar (right) of Bayleys.