Property has ‘recession proof’ tenants
A Salvation Army store is one of the tenants at 1 Glendale Rd, Glen Eden. Photo / Supplied
A Glen Eden property leased to the Salvation Army store and Cash Converters has been put on the market for sale.
The 1511sq m freehold corner site at 1 Glendale Rd, earns $251,224 net from the tenants - both on long leases.
Bayleys sales agent Mike Adams says the strong lease covenants and high-profile nature of the location should drive interest from investors.
Adams, and colleagues Jean-Paul Smit and Alan Haydock, are marketing the property for sale by auction on April 1, unless sold earlier.
The property, which has a capital value of $3,325,000, has 680sq m of space in a modern building, plus 33 on-site car park spaces. Its Auckland Unitary Plan, Business-Town Centre zoning, permits development options including buildings up to 27m high.
Cash Converters occupies 370sq m of space, on a six-year lease term ending in October 2022, with two six-year right of renewals. The tenancy, which includes 17 parking spaces, generates $131,986 net in annual net rent.
The Salvation Army occupies 309sq m, on an initial two-and-a-half-year lease ending in May 2019, with two rights of renewals of two-and-a-half years each. The tenancy, which includes 16 parking spaces, generates $119,237 per annum.
Adams says the tenancies are predominantly open-plan and have significant natural light from multiple window frontages. The corner tenancy, taken by the Salvation Army, includes a partitioned rear office/storage space and offers internal access to the car park.
“Both tenants represent well-established nationwide brands and have a steady business model that is largely immune to any downturns in the economy,” says Adams.
“In addition, the property is positioned a busy corner site that sees more than 20,000 vehicles pass daily and is surrounded by a vibrant mix of businesses. Glen Eden is a fast-growing commercial and retail precinct with a wide range of amenities; and the corner of Glendale and West Coast Rds is close to multiple public transport services, including its train station,” says Adams.
“This property will be of interest to investors wishing to landbank significant holdings around transport hubs identified as ripe for intensification and development.
“The zone provides for a wide range of activities, including commercial, leisure, residential, tourist, cultural, community and civic services, and provides a focus for commercial activities and growth.”
The property occupies a high-profile corner site in West Auckland. Photo / Supplied
The Salvation Army operates more than 100 Family Stores across New Zealand which sell donated second-hand goods and are among the most well-known and visible parts of the charity’s work. Store profits go towards supporting the Salvation Army’s community relief work. The charity views the stores as a way to help families on tight budgets gain access to quality, second-hand items at affordable prices. They also help with emergency relief for people in urgent need, supplying items from furniture and household supplies to clothes.
Cash Converters, which has had a presence in New Zealand since 1993, primarily offers pawnbroking, payday loans and instalment loans. The company's network of stores also trades in second-hand goods — typically jewellery, home entertainment equipment, sports gear and musical instruments.
“Analysts generally view pawnbroking as ‘recession-proof’ as many of the sector's customers are judged to be already living in tight financial circumstances. Charity shops are viewed in a similar light,” says Adams.
“Charitable giving in New Zealand, particularly the donation of second-hand goods to charity shops, is high. Figures from 2016 show that Kiwi charitable donations made up 0.79 per cent of the country's gross domestic product, and that Kiwi volunteers contribute around 270m hours to the community.”