Showroom has ‘hot’ Ponsonby address
The standalone freehold property at 49 Mackelvie St, Ponsonby, is identified by an orange border. Photo / Supplied
A ‘chic’ industrial showroom for sale in Ponsonby represents a rare chance to buy into one of the Auckland suburb’s tightly-held areas.
“To illustrate the rarity factor, this is the first time this property has been on the market in 26 years,” says Everett Jaura, commercial broker with Wilson and Hurst.
“Over the last two decades there have only been a handful transactions on the ‘golden triangle’ bordered by Mackelvie St, Ponsonby Rd and Williamson Avenue,” Jaura says.
“Historically, similar warehouse buildings in this area running between Ponsonby Rd and Rose Rd, were popular as mechanics' workshops and for other light industrial uses. With Ponsonby’s gentrification over the last decade, the area is now dominated by retail and fashion tenants.
“To find a standalone freehold property like this, just off Ponsonby Road with its high-end restaurants and boutique shops, is really something," says Jaura.
He says the 420sq m building on a 481sq m site has masonry walls and concrete columns with a metal roof on timber rafters and comes with five carparks.
The tenant is Photo Gear Ltd, which covers 100 per cent of the outgoings and pays a net annual rent of $112,500.
Jaura describes the six-year lease running through to October 2022, with final expiry in September 2028 as "gratifyingly solid".
He says the lease has “almost every protection imaginable” built in including a 12-month demolition clause that kicks in from October 2022.
The industrial showroom is occupied by Photo Gear Ltd. Photo / Supplied
"This lease comes with a personal guarantee plus a six-month gross rent guarantee from the bank. Generally, leases will come with either one or other but we see very few leases - as is the case here – having both a bank and a personal guarantee," says Jaura.
Wilson and Hurst leasing brokers, Jack Hall and Paul Kinghan negotiated the lease in 2016, with a rent review mechanism alternating between a 3 per cent fixed increase and market rent reviews every year and a half. The first 3 per cent increase is set for April 2018, followed by a market rent review in October 2019 with alternating reviews every 18 months thereafter.
They describe the lease as “a dream lease” that will appeal to developers. “With tighter lending and questions around market cyclicality, they are looking for opportunities with secure holding income alongside the freedom to develop when the time is right. So, 49 Mackelvie offers just that, along with a hot Ponsonby address.”
Passive investors will be attracted to the property by its solid tenant, strong covenants and impressive rent reviews.
Zoning under Auckland Unitary Plan zone is Mixed Use, allowing for an 16m height limit on the site and a wide range of permitted activities.
These include residential dwellings, commercial uses, food and beverage, retail, small supermarkets, light industrial and even healthcare facilities. The Surrounding neighbours are commercially zoned and it is possible with Council consents that additional uses could be explored within the zone.