Medical centre a split-risk investment

6:32 PM Friday September 29, 2017 True Commercial

Kowhai House comprises two buildings with a net lettable area of 1170sq m. Photo / Supplied

A fully tenanted Warkworth medical centre is a split-risk investment property in one of Auckland’s fastest-growing centres, say brokers.

Colliers International is marketing the centre, at 4 Warkworth St, by deadline private treaty closing on October 26, unless sold earlier. It features in the agency’s latest nationwide Portfolio.

The eight tenancies earn net rent of $267,608 a year, says broker Sean Honeycombe, who is marketing the medical centre with colleagues Shoneet Chand and Jonathan Lynch.

“This is a superb opportunity to acquire an established medical centre investment in one of Auckland’s most up-and-coming locations,” says Honeycombe.

“Known as Kowhai House, the property benefits from more than two decades of continuous occupation by a radiologist, doctors’ surgery and physiotherapist.

“The strong tenancy mix is rounded out by a chiropractic clinic, acupuncturist, massage clinic and two commercial tenancies.”

The 1761sq m freehold property comprises two buildings with a net lettable area of 1170sq m.

The larger building features two levels fronting Warkworth St to the north, and two levels fronting a car park to the south. A standalone single-storey building is also accessed from the car park.

Honeycombe says the property is close to all of Warkworth’s key amenities.

There’s ample parking on Warkworth St and in the carpark to the rear, which is entered via Alnwick St and exited via Percy St.

He says the area has attracted increased commercial development activity in recent years.

“Kowhai House is only a stone’s throw from the historic BNZ Building, which was fully refurbished and redeveloped last year.

“Nearby is a large-scale Mixed Use development that will include a retirement village and new retail units fronting Neville St.”

Chand says Warkworth, only 45 minutes from downtown Auckland, is undergoing a transformation from a weekend holiday destination to a fast-growing satellite centre.

“Warkworth has grown rapidly in recent years, with its population increasing 15.7 per cent between the 2001-2006 censuses, and a further 19.5 per cent between the 2006-2013 censuses.

“The wider area is also growing apace, with northern Rodney’s population of 60,000 projected to increase by a further 20,000 people in the next 20 years.”

Auckland Council’s Development Strategy identifies Warkworth as one of two major satellite centres and a key residential growth area.

“The area has traditionally been typified by lifestyle blocks, retirement housing and holiday homes, but increasing numbers of families and professionals are now starting to make Warkworth home,” Chand says.

Lynch says the property has a good seismic rating, at 75 per cent Initial Evaluation Procedure (IEP).

It is zoned Business Town Centre under the Auckland Unitary Plan, which provides for a wide range of activities including commercial, leisure, residential, tourist, cultural, community and civic services.

“A range of possible building heights can be developed, depending on the context, with provisions typically enabling buildings of between four and eight storeys.”

Lynch says the three anchor medical tenants, which have all operated from the building since 1995, account for almost 60 per cent of its rental income. The largest, Kowhai Surgery, occupies a 289sq m tenancy.

“Kowhai Surgery is a well-established family and general practice medical centre with a strong reputation for high-quality, friendly and affordable healthcare services,” Lynch says.

“Kowhai Physio, which occupies a 176sq m tenancy, offers a comprehensive range of physiotherapy and rehabilitation services, including treatment for sports and occupational injuries.

“Hibiscus Radiology, which provides diagnostic radiology services including X-rays and ultrasounds, occupies 142sq m.”

The remaining tenancies range in size from 31sq m to 232sq m. They are leased to RMA Financial, Acorn Chiropractic, Kansa Body Balance, Warkworth Acupuncture and retailer Gold Coin.