Top properties on busy Lincoln Rd
Brokers say Texas Chicken returns $165,000 per annum, with a new 15-year lease offering stability.
Two top investment opportunities have come up for investors on one of the busiest roads in Auckland, featuring a global fast-food giant, and an experienced childcare operator with a proven track record, say brokers.
The properties at 303-307 Lincoln Rd will be sold individually by auction on October 12.
Colliers International brokers Shoneet Chand, Matt Prentice and Sean Finnegan are marketing fast-food chain Texas Chicken, positioned at the entrance of the development by Aubrey Edward Group.
“In 2015 Texas Chicken started their 15-year-lease term, plus two further rights of renewal of six years each, in this standalone purpose-built, high-quality facility, which offers strong rental upside in one of Auckland’s best fast-food sites,” says Chand.
Texas Chicken is part of a global brand that has more than 1600 outlets in more than 25 countries.
“It is extremely rare to offer brand new fast-food investments of this calibre to the open market like this in Auckland. Texas Chicken returns $165,000 plus GST per annum and their new 15-year lease offers fantastic stability,” Prentice says.
The store is one of Texas Chicken’s three New Zealand premises, with plans to grow to 20 restaurants in one of what Finnegan calls “one of the most exciting bottom-drawer investment opportunities of 2016.”
Chand is also marketing a new childcare centre, directly neighbouring Texas Chicken, which he is marketing with colleagues Peter Kermode and Craig Smith, by the same developer.
The purpose-built facility has a licence for 98 children and is run by Co-Kids Childcare.
This investment opportunity provides a brand new 12-year-lease, with two further 12-year rights of renewal and a net rental return of $214,032 plus GST per annum.
The purpose built Co-Kids Childcare facility has a licence for 98 children.
The rental equates to $42 per child per week, which Chand says is arguably below market rates. The property’s rental growth is offered through yearly reviews against the Consumer Price Index with market reviews every six years.
“Childcare is seen as an essential service by central government right across the political spectrum. But there are high barriers of entry in the sector to build new centres due to limited land supply, high land values, and increasing stringency around consenting,” says Kermode.
“Considerable good-will is attached to the business and location meaning that once they are up and running, childcare centres prove to be fantastic long term tenants. This building is brand new with quality fixtures and fittings while being built to 100 per cent of the New Building Standard, all of which are highly desirable characteristics when banks are considering lending,” Smith adds.
The property’s high construction quality will ensure a longer-lasting, lower-maintenance product and the long term lease with good rental growth potential make it a highly desirable package for investors looking to expand their portfolio.
“The property will be looked after by Centurion Body Corporate, so external maintenance is taken care of,” Smith points out.
The total development offers generous on-site car parking and complementary retail amenity within the development for parents.
“The low starting rental gives the tenant greater means to grow the business quickly, and provides income growth potential for the new owner a little further down the track,” Chand says.
The site’s prominent signage exposes the two businesses to 45,000 cars a day. It comes with dual entry and exit points and is 600m from State Highway 16.
“It is 500m to Lincoln North Shopping Centre, only a kilometre from the newly built NorthWest Shopping Centre, and 5km to the north from Westgate,” says Smith.
Four major Special Housing Areas are situated a 10-minute drive away on Fred Taylor Drive, destined to house approximately 4000 homes in the next 10 years, which Chand says ramps the area’s strategic desirability.
“Lincoln Rd is one of the most popular and sought after destinations in Auckland among retailers looking to take advantage of the high passing traffic and proximity to the dense surrounding residential catchment,” says Finnegan.
Lincoln Rd is a four-lane major feeder route which runs from Swanson Rd in the south to the north-western motorway.
It is a primary link between Henderson town centre and surrounding suburbs, and is home to a mix of local and national, bulk and convenience retail centres, general commercial premises and housing.
“With major upgrades to the north western motorway underway and the anticipated completion of the Western Ring Route in 2017, accessibility to and from the site from surrounding suburbs are set to drastically improve,” says Smith says.