Properties to bank on at June auction

1:54 PM Saturday June 14, 2014 Colin Taylor

A large Bank of New Zealand outlet in a prime position opposite LynnMall Shopping Centre in West Auckland is featured among several retail properties to go under the hammer on June 25 as part of Bayleys' latest Total Property portfolio auction of commercial and industrial properties.

The 325sq m freehold unit titled property at 3029A Great North Rd, New Lynn earns net annual rent of $142,700 plus GST and is being marketed by Jim McKinlay of Bayleys' Tauranga office in conjunction with Mike Adams of Bayleys Auckland.

McKinlay says the BNZ has occupied this site since 2002 and entered into a new lease in 2011 after an extensive internal renovation of the unit which has an A-plus seismic rating.

"The bank is on an eight-year term, with three rights of renewal of three years each. If exercised, this would take the final expiry of the lease out until 2028," he says.

The unit is at the southwestern corner of a block of four modern commercial units with access off both Great South Rd and Veronica St at the northeastern end of the site to a common area with extensive car parking.

There are five dedicated customer car parks at the front of the building and a further five covered and five uncovered car parks at the rear available to the BNZ.

Adams says New Lynn's population has increased by 17 per cent since 2001 and will continue to expand as a result of the ongoing transformation and revitalisation of the suburb which has been identified as one of the key metropolitan centres that will service Auckland's rapid growth.

A major urban renewal project incorporating high-density housing is aiming to provide new residences for 20,000 people and jobs for 13,000 by 2030. Spending on upgrading infrastructure in the town centre has so far included a $380 million underground rail station and bus interchange, a public car parking building on the former bus station and an upgrade of New North Rd.

"All this is making New Lynn a much more sought-after location for retailers with LynnMall continuing to be a dominant drawcard for shoppers," says Adams.

"The 32,000sq m mall with 130 retail tenants and 1412 car parks has attracted a strong cluster of strip retailers around it like the BNZ which is strategically located opposite the shopping centre and benefits from high exposure to passing traffic on the arterial route."

Adams says a nearby 412sq m shop at 3045 Great North Rd, occupied by another longstanding tenant, Dick Smith Electronics, sold at a Bayleys' auction this year for $2,470,000, after attracting good interest.

Further north in Wellsford, a retail property with substantial exposure to State Highway 1 running through the centre of the town will also go under the hammer on June 25 in Bayleys' central Auckland auction room. It encompasses a big block of land totalling 4453sq m and is home to a Four Square superette, a Kiwibank/New Zealand Post shop, a weatherboard house and a large car parking area with development potential.

The property is being marketed by Damian Stephen and Michael Block of Bayleys North Shore Commercial; and Duncan Napier of Bayleys' Warkworth office.

Block says the property is being offered in two lots. "One lot contains the investment properties and the other is basically a bare block of development land so they have different purchaser profiles," Block says.

"However, the entire site has long-term redevelopment potential and offers a big picture opportunity for someone with vision who could maximise the value of the property over time while banking some income in the short to medium term."

One lot, at 199-201 Rodney St, encompasses the Kiwibank/NZ Post and Four Square tenancies and a vacant three-bedroom house at the rear and has 1540sq m of land. The commercial tenancies are producing net annual rental income of $92,000 plus GST and the residential dwelling has a rental appraisal of $220-$250 a week if improved.

The second lot at 207 Rodney St comprises 2913sq m of land which is producing annual income of $3000 plus GST from the lease of 12 car parks used by Four Square customers. This site also has access off El'Hama Rd which connects with a service lane running parallel to the main street.

Stephen says the property is currently zoned Retail Service where shops, offices and associated commercial services are primary activities. He says the proposed Town Centre (Wellsford) zoning under the Unitary Plan could provide more scope for mixed-use development.

Permitted activities include retail, office and residential dwellings with the potential to build up to 16.5 metres subject to controls relating to street frontage.

Stephen says any development undertaken while the Four Square tenancy is in place would need to separate the 12 car parks off with fencing and driveway access.

Wellsford services a surrounding horticulture and farming community that now includes a substantial dairy sector as well as benefiting from high volumes of motorists heading north and south along State Highway 1.

"Being roughly halfway between Auckland and Whangarei, travellers often fill up with fuel, call into the superette for supplies and take advantage of the quick service eateries that line the main street," Napier says.

Also among 15 commercial and industrial properties for sale at the June 25 auction is another property in a high-profile main road position at 205-207 Great South Rd, Papakura.

The 627sq m building on a 329sq m site is producing net annual rental income of $91,192 from multiple tenancies and is being marketed by Piyush Kumar, Shane Snijder and Peter Migounoff of Bayleys Counties.

Kumar says anchor retail tenancy Urban Pharmacy has been in occupation since the three-level building was constructed in 1968.

"Over 70 per cent of the current cash flow is derived from three established professional tenancies: the pharmacy, a law office and dental practice which are on five- to six-year leases plus rights of renewal with three other smaller tenancies.

"This is a tidy, split-risk investment opportunity in a highly popular, central Papakura position on the western side of the busy Great South Rd next to Papakura's library and museum.

"A multi-levelled car parking building provides free public car parking directly behind the property and the location is dominated by strip retail outlets with neighbouring tenancies including major trading banks," Kumar says.