Cafe and bar tenants in Napier’s West Quay

10:58 PM Wednesday October 3, 2018 True Commercial

Cafe de Laos and Ashoka lease the waterfront ground floor unit. Photo / Supplied

A street-level retail harbourside unit in Napier’s West Quay precinct, occupied by two hospitality tenants, is now for sale.

Colliers International is marketing 14R West Quay, Ahuriri, for sale by deadline private treaty closing at 4pm on October 18, unless it sells earlier.

Broker Dan Walker says the 539sq m ground-floor unit earns $73,409 plus GST in net annual rent.

“This is an outstanding opportunity to acquire an under-rented, split-risk investment property in one of Napier’s key hubs of urban renewal,” says Walker.

“It comprises a modern, single-storey retail unit with glass frontages and patios opening out onto the inner harbour of West Quay. It is part of a larger development, completed in the mid-2000s, including high-end apartments and two other retail units.

“The property is tenanted by Cafe de Laos, which has been there for more than 10 years; and Ashoka Indian restaurant and bar. Both tenants, despite being on relatively short-lease-terms, have expressed interest in extending them.”

Walker says Cafe de Laos has invested in its restaurant fit-out, which suggests significant tenant goodwill.

“Investors can add value through market rent reviews, then reap the benefits from a solid passive investment property.”

He says Cafe de Laos is signed to a three-year lease from December 2016, with two rights of renewal of five years each. The lease earns $65,217 in annual rent, with two-yearly market rent reviews.

Ashoka is signed to a three-year lease from August 2016, with two rights of renewal of five years each. The lease earns $26,000 in annual rent, with two-yearly market rental reviews. After outgoings, the property generates net contract rent of $73,409 per annum, which a recent Telfer Young valuation has assessed to be below market rates.

Cafe de Laos specialises in Laotian and Thai cuisine with its dishes making the most of the flavours of Southeast Asia - described as comprising sweet, sour, spicy and fresh combinations.

The restaurant has a 4.5-star rating on TripAdvisor.

Ashoka took over its lease from Fox on the Quay and has become a popular addition to Napier’s culinary scene. It has a 4.5-star rating on TripAdvisor and a 4.9-star rating on Facebook.

Walker says the restaurant has stunning views, with floor-to-ceiling windows making the most of the harbourside site.

The property for sale is zoned Mixed Use and is situated on the southern side of West Quay, overlooking the inner harbour; slightly removed from the main commercial strip.

“West Quay is heavily populated with hospitality users including bars, restaurants and hotels.” says Walker.

“Napier has a smaller population than the neighbouring city of Hastings but is regarded as the main centre of Hawke’s Bay due to being close to the region’s seaport and main airport.

“It’s a popular tourist destination and a key rural and agribusiness hub.”

The West Quay area is a heritage precinct that draws its character from the port and industrial activities surrounding it.

Ahuriri has undergone active redevelopment in recent years, including council-led upgrades to the West Quay streetscape and planting.

High quality commercial and residential developments have been focused on the Hardinge Rd foreshore and the West Quay inner harbour areas.

Suburban services include a shopping centre, schools and range of amenities including restaurants, bars and accommodation.

The West Quay carriageway has diverted heavy traffic from the area and enhanced the desirability of the immediate location, to the benefit of residents and local bars and cafes.