Three retail units in Warkworth development
Artist’s aerial impression of The Grange retail development nearing completion at 67 Auckland Rd, Warkworth.
Three units in a new Warkworth retail development nearing completion on a high exposure site on State Highway One will go up for auction individually early next month.
The units, to be occupied on new long term leases by national retail brands Coffee Club and Bottle-O as well as an Indian Restaurant, are among 46 properties scheduled to go under the hammer in Bayleys’ central Auckland auction room on December 2 unless they sell earlier by negotiation.
For sale as part of Bayleys’ latest Total Property portfolio, the Warkworth units are being marketed by James Chan, Matt Lee and Quinn Ngo of Bayleys Auckland and Steve Orr of Bayleys Warkworth.
Chan says with annual rental incomes starting at $50,500, the units are in an affordable price bracket for smaller investors and family trusts looking for strongly located retail investment opportunities in a high growth area. The units are part of The Grange, a new retail service centre development, scheduled for completion in various stages from the end of 2015 to early 2016.
“The properties for sale are well-located near the entrance of this new complex adjacent to McDonalds, a BP Service Station and Domino's Pizza, which have already sold,” says Chan.
The largest of the units up for auction which contains the Coffee Club tenancy is located in a high profile positon opposite the entrance to the centre. It comprises an indoor area of about 160 sq m and a covered, all-weather deck and courtyard area of 50 sq m.
It will be sold with a new 10-year lease, plus one 10-year right of renewal, to The Coffee Club Properties (NZ) Ltd at an initial annual rental income of $82,500.
Chan says a feature of the lease is the built in rental growth with fixed annual increases of 3 per cent.
“This will result in a significant increase in income over the next decade as the lease runs its course.”
The Coffee Club has 375 cafes across the globe, including 55 in New Zealand, and more than 6000 employees serving more than 40 million coffees annually. Founded in Australia in 1989, the cafe business has expanded rapidly in New Zealand in the past 10 years, establishing a strong foothold in the hospitality industry.
Lee says the strength of its franchise system was recognised in the 2015 Westpac New Zealand Franchise Awards, where The Coffee Club won the Food & Beverage Best Franchise System and Supreme Franchisee in New Zealand awards - following on from past award successes since 2011.
“Indicative of their commitment to the New Zealand is the fact that the guarantee for lease of this unit has been provided by one of two joint directors of The Coffee Club New Zealand,” Lee says.
Artist’s street view impression of some of the retail outlets within The Grange development at Warkworth.
A 200 sq m unit occupied by national liquor retailer Bottle-O will be offered for sale with a new eight year lease, plus two four-year rights of renewal, producing initial net annual rental income of $70,000. It too has built in rental growth, with annual reviews linked to the Consumer Price Index (CPI) plus 1 per cent, as well as ratcheted four-yearly reviews to market.
The Bottle-O is a national liquor chain of independently owned and operated stores specialising in the sale of liquor products. Lee says the franchise network currently has 67 stores throughout New Zealand, in addition to over 200 stores in Australia.
The third unit for auction comprises a 117 sq m restaurant plus a 25 sq m deck area that will be leased for 10 years to an Indian restaurant, with two five-year rights of renewal, at an initial net rental income of $48,210. This increases to $50,550 in the third year of the lease followed by subsequent annual reviews to CPI plus 1 per cent and to market every five years.
Orr says The Grange, positioned on the eastern side of Warkworth, will be the sole retail service centre along State Highway One (SHW1) travelling south between Wellsford and Auckland, with a right hand turn also into the centre for traffic travelling north into Warkworth. A New Zealand Transport Agency’s Transportation and Traffic Assessment Report in August 2013 on the Puhoi to Warkworth section of SHW1 recorded an average traffic volume of 17,400 cars per day, or approximately 6.35 million cars per year.
“This a high profile site with massive exposure to huge volumes of passing traffic,” says Orr. “The new retail service centre, which will include other major leading national brands, will source customers from traveling motorists and the growing local population and surrounding catchment area of permanent and holiday residences.”
The development will incorporate a pedestrian-friendly plaza, with timber seating looking out to native vegetation, a picnic lawn plus a viewing deck. A timber swing bridge will connect the retail centre to a cycle track through the bush.
The immediate area hosts a range of established businesses including Mitre 10 Mega, Carter’s, Repco and VTNZ.
Orr says Warkworth has recorded massive population growth in recent times, increasing 15.7 per cent between the 2001-2006 Census and a further 19.5 per cent between the 2006-2013 Census. With a median age of 44.3 years old, the area is well positioned for continued major growth into the future, he says. “The Grange is poised to capitalise on this growing population base, whilst also servicing increasing numbers of visitors – New Zealand residents travelling to and from holiday homes or international tourists experiencing a self-drive holiday.”
(From left to right) James Chan, Steve Orr, Matt Lee, and Quinn Ngo of Bayleys.