Sale of Wendys’ site gives food for thought
The Wendys Restaurant at 80-82 Great South Rd, Papakura.
A large block of Papakura freehold land on one of Auckland’s main arterial roads that has been occupied by a Wendy’s Restaurant for the past 15 years is among over 20 properties featured in Bayleys’ latest Total Property portfolio that will be auctioned in the agency’s central Auckland auction rooms later this month.
Located at 80-82 Great South Rd, Papakura, the property encompasses two similar sized land titles totalling 2117 sq m and a 320 sq m building. It is leased to Wendy’s New Zealand holding company Wendco (NZ) Limited on a 20 year lease from May 2000 with no rights of renewal and is producing net annual rental income of $160,577.
Eddie Zhong and Damien Stephen of Bayleys North Shore Commercial; and Peter Migounoff of Bayleys South Auckland are marketing the property for auction on October 28, unless it sells earlier by private treaty.
“This property has many investment attributes including the size of the land along with its superb main road frontage and solid cash flow generated by its well-known international brand occupant,” says Zhong. “The property is in one of the best strategic locations in Papakura as Great South Rd curves slightly towards the site. This provides maximum exposure for the building and presents the tenant’s signage to an average of more than 20,000 vehicles passing the property daily.”
The 80 Great South Rd portion of the property comprises 1037 sq m of land and is used by the tenant for customer car parking while 82 Great South Rd has about 1080 sq m of land. It also contains a design built restaurant for Wendy’s including a drive through along one side of the building and out the other. “It’s a level, nicely landscaped site and the building features clean lines, bright lighting, rich colours and has been well designed for customers either wanting to eat at the restaurant or take their food away,” says Zhong.
Stephen says the new owner has a number of options when Wendy’s current lease expires on May 20, 2020 given that the tenant does not have an automatic right of renewal.
“Obviously, they could explore the possibility of re-leasing the existing building or they could investigate the option of developing the site more intensively given that the property’s new Metropolitan Centre zoning under the Proposed Auckland Unitary Plan should be in place by then. By that stage, the property will have generated close to $700,000 of rental income for the purchaser which could be put towards its redevelopment.”
Aerial view depicting 80-82 Great South Rd, Papakura, within its setting.
The Metropolitan zone applies to major centres located in different sub-regional catchments of Auckland and permits a scale and intensity of development second only to the Auckland CBD. The zone provides for a wide range of activities including commercial, leisure, high-density residential, tourism, cultural, community and civic services, with a maximum height limit of 21 metres applying to the Papakura Metropolitan zone. Any new buildings within the zone will require resource consent to ensure that they are designed to a high standard and enhance the quality of the centre’s streets and public open spaces.
The property is located on the main arterial route between Takanini and the Papakura central business area and is surrounded by a substantial, expanding residential area with Papakura District’s population estimated to be growing at 15 times the rate of New Zealand as a whole.
“Papakura is expected to experience continuing strong population growth as more central locations become too expensive for low to middle income families and as the area benefits from the Auckland Housing Accord’s Special Housing Areas,” says Migounoff. “There are thousands of residential sections planned all around Papakura with 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 based businesses.”
Wendy’s, which leases the property, was established in 1969, originally starting out as a family business in Columbus, Ohio, and was named after the daughter of founder Dave Thomas. Its point of difference was serving trademarked square hamburgers with fresh, not frozen beef.
Now the world’s third largest burger chain, Wendy’s has over 6500 restaurants in 29 countries. It opened its first New Zealand restaurant in Te Atatu in 1988, with the west Auckland-based Wendco (NZ) Limited now operating a chain of 14 outlets in Auckland and eight in other parts of New Zealand.
Damien Stephen, (left) & Peter Migounoff, (right) of Bayleys.
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