Split risk investment in Island Bay landmark
Clarke’s Buildings at 121 The Parade, Island Bay, Wellington is a local landmark. Photo / Supplied
The sale of a mixed-use building, leased to retail and residential tenants in Island Bay, Wellington, represents a chance to purchase a split-risk landmark investment property.
Clarke’s Buildings, at 121 The Parade, Island Bay, Wellington, is for sale by deadline private treaty closing on July 19 through Colliers brokers Sam McIlroy and Tim Bowden.
“This sale of this fully leased, two-level building presents an outstanding opportunity to purchase a ready-made diversified investment,” says McIlroy.
“Retail and residential are two of the most popular property investment categories at the moment. This offers a great prospect for a buyer to get the best of both worlds – with retail tenants downstairs and apartments upstairs,” he says.
The building, constructed in 1923, features a well-preserved ornate classical facade on the upper level, making it a local landmark. Its 420sq m of internal floor area is split across three ground floor commercial leases and two residential apartments upstairs. Two advertising leases complete the gross annual income of $121,237.
“A recent market rental valuation showed the residential component of the building is under-rented,” says McIlroy.
“A buyer could adjust the apartment rentals up to market levels, increasing the property’s total rent roll and adding value for the new owner,” he says.
The commercial tenancies are leased to three local businesses: Island Bay Bakery, Bunkhouse Graphic Design and Crown Indian Takeaways, on leases expiring in 2022 - if rights of renewal are exercised. The apartments both have four bedrooms and rear ground floor courtyards.
The building is on a 339sq m freehold site within easy reach of bus routes, the local New World supermarket, childcare, medical facilities and Wellington’s South Coast beaches.
“We know investors are searching for diversification and ways to spread their investment risk across different sectors,” McIlroy says. “Properties like this are a great solution to that problem, although they’re not seen on the open market very often as they are tightly held.”
The property’s location in the Island Bay commercial centre, a suburban hub where there is little vacancy, is expected to be a further drawcard, says Bowden.
“Island Bay is a thriving and affluent suburb, popular with families and offers a vibrant cultural scene. The commercial centre has grown over the years and is now a busy town centre for the local community, providing a good range of shops and services. This makes it a sought-after place to buy investment property.”
Sam McIlroy and Tim Bowden, Colliers International