Retail units in renewed centre lure investors
The centre is at the junction of Wairau and View Rds on Auckland's North Shore. Left, the mixed business units include a fruit and vege supplier and unisex salon.
Six units in the Wairau Junction retail convenience centre on Auckland's North Shore, which are occupied by a mix of local and national businesses, are being offered for sale individually as part of Bayleys' latest Greater Auckland commercial and industrial property portfolio.
"With net annual rentals ranging from $12,000 to in excess of $200,000 they will appeal to a wide range of investors," says James Chan of Bayleys Auckland who is marketing the units with colleague Matt Lee, and Damian Stephen of Bayleys North Shore Commercial.
The units are among 22 tenancies in the Wairau Junction retail convenience centre located in a high profile corner position at the intersection of Wairau and View Rds in the Wairau Valley. The property was purchased by Midpoint Investments Ltd in 2013 and has undergone a significant renovation which has attracted a number of new tenants as well as enabling longer leases to be negotiated with existing tenants.
The six units are the final tranche of tenanted properties to be put up for sale in the centre. Over the past seven months, Bayleys has sold 14 Wairau Junction investment properties ranging in price from $360,000 to $3,008,800 at yields ranging from 5.7 per cent for a Westpac bank branch to 7.6 per cent for the largest property in the centre, a Valentines Restaurant.
Chan, who is project managing the sale of the units, says Midpoint Investments is committed to divesting the remaining six tenancies which are:
• Unit 3: A Nando's food outlet occupies this 189sq m unit in a prime position with substantial exposure to busy Wairau Rd. The property produces net annual rental income of $73,000 with close to five years remaining on its lease which has annual rent reviews to the Consumer Price Index (CPI) plus 1 per cent. Established in 1987, Nando's specialises in providing specialised chicken meals and expanded into New Zealand in 2000 where it has 31 franchised outlets. Close to 1000 Nando's premises can be found in 30 countries.
• Unit 8: Adamar Group leases the smallest unit of 34sq m which is producing net annual rental income of $12,000 from a six year lease commencing October 2013 with annual rent reviews to the CPI plus 1 per cent. Adamar Group owns five Nando's restaurants around Auckland and also has business interests in China. The unit is currently configured as office space but could also be used for retailing.
• Unit 9: Lobi Hair, a modern, unisex hair salon has been in occupation at Wairau Junction since 2011. Its 65sq m premises has undergone a significant refurbishment as part of the upgrading of the retail centre and a new six year lease from September 2013 is generating net annual rental income of $31,000.
• Unit 12: CityFitness occupies 1126sq m of the upper level space on a very long lease that has over 16 years to run. It is producing net annual rental income of $210,000 which will increase to $240,000 in November 2015. The well-established gymnasium has 21 clubs nationwide. The Wairau Junction club's substantial fitout includes modern gymnasium facilities and equipment and a sauna room. A small section of the unit is subleased to BodyZone Physiotherapy, an ACC registered physiotherapy and massage clinic that has another established branch in Howick.
• Unit 15: Produce Planet, an Asian and European fruit and vegetable store, occupies 330sq m on a 10 year lease that commenced in December. The store complements other food tenancies in the centre providing a convenient stop for all produce needs. The lease is producing net annual rental income of $70,000 which will increase to $85,000 in December 2015 and then to $95,000 in December 2017. Produce Planet has two similar stores in Devonport and St Johns.
• Unit 22: Wairau Foods & Spices is the retail business of Reliance Import & Export Ltd, an importer of Indian, Middle Eastern and Asian groceries, spices and bulk food, which carries over 2000 different products. The business has been wholesaling for the past three years and has expanded its operations to include a strong retail presence in Wairau Junction, strategically positioned alongside Butcher Jacks and Produce Planet. It has a three year lease which commenced in February over 189sq m premises and generating $50,000 per annum net.
Units 3, 9 and 15 will go under the hammer as part of Bayleys' next Greater Auckland portfolio auction on September 10 while Units 8, 12 and 22 are for deadline sale closing on September 16.
Chan says Wairau Junction has been given a complete facelift, with new facades on all of the tenancies giving greater street appeal and visibility. New fire sprinkler systems have been installed through all premises and Midpoint Investments has worked with some existing tenants to reconfigure and renovate their interiors. The building has a seismic rating in excess of 100 per cent of new building standard (NBS).
"The fact that the complex has been refurbished and future-proofed to an 'as-new' standard makes it attractive to investors, as does its very strong location on a major arterial road," he says.
Wairau Rd is a main connector road to and from the State Highway 1 motorway and has an average traffic count of around 30,000 vehicles a day. There are multiple access points to and from Wairau Junction off Wairau and View Rds and there is abundant parking around the building for up to 155 cars. The site is also located on a major traffic light controlled intersection with Target Rd, the main access road to and from the Link Drive bulk retail shopping precinct.
Stephen says as well as drawing customers from the substantial volume of passing traffic and a large residential catchment, retailers at Wairau Junction will also benefit from a commercial centre to be developed on the site. This will encompass 10 office, showroom and warehouse units that will also provide additional clientele for the retail tenancies. Five of the units which are between 122sq m and 142sq m, with two car park spaces, have already been sold.
New to the Wairau Junction following its refurbishment are a number of expanding national food and beverage businesses including Coffee Club, Pita Pit and Jesters Pies, as well as Nando's. Valentines Restaurant has been an anchor tenant for the past 20 years and has renewed its lease for another 12 years while other occupants include Westpac, Pizza Hut and Hell Pizza.