Receivership sale for prized Courtenay Place properties

12:53 AM Monday September 9, 2019 True Commercial

Neighbouring properties in Courtenay Pl, Wellington, return combined annual rent of more than $350,000. Photo / Supplied

On instruction from receivers BDO, two neighbouring commercial properties at 128 and 132 Courtenay Pl, Wellington,  are being offered for sale by tender,  separately, or together.
Located at the Manners St end of the capital’s premium hospitality strip, just short of the intersection with Taranaki St, the two Courtenay Pl properties are occupied by Danger Danger bar and pizzeria, and the day-night café, Enigma.
Both businesses are trading independently of the receivership sale of land and buildings.
As gazetted, the registered property owner Hoda Holdings Ltd is in liquidation and receivership,  with Iain Shephard and Colin Gower of BDO appointed as receivers in June this year.
Andrew Smith and Mark Sherlock of Bayleys Wellington are marketing the individually-titled properties and say that Courtenay Pl remains the hospitality epicentre of the city with investment opportunities few and far between.
“As a destination hospitality precinct, Courtenay Pl is enduring,” says Smith. “Bars and restaurants along this strip are flourishing and you only have to witness the mass migration of rugby fans from the stadium to the Courtenay Pl precinct on game night to see how popular it remains.”
Combined, the two properties currently return $351,710 net income per annum. 
The Enigma café trades from 128 Courtenay Pl with 169.29sq m of lettable space,  including commercial kitchen, and with an additional 71.4sq m courtyard, with an informal month-to-month lease arrangement. 
The single-storey building was built around  1914 and is primarily a timber-framed structure with an iron roof and various brick elevations.
The building was formerly home to popular cafe Espressoholic from 1991 to 2009, before the  cafe  relocated to Cuba St.
A Wellington City Council LIM report reveals the building is earthquake-prone and will require strengthening by June 2030. 
Danger Danger trades from 132 Courtenay Pl with a six-year lease in place and further renewals beyond expiry in 2022. The lettable space is 267.09sq m across two levels with a further 161.7sq m of deck area.
The original high-stud structure dates back to the 1890s and it has undergone various refurbishments since then. It also has timber framing, concrete flooring and an iron roof. 
It is fitted out with a bar near the street frontage and a small kitchen and amenities to the rear. There is a high-stud atrium in the centre of the building and a mezzanine floor with a second bar accessed via a steel stairway. 
There is a balcony above the verandah and an outside guest area right at the street frontage. 
This building has also been identified as earthquake-prone and requires strengthening by January 2025.
Sherlock says while the simple timber buildings do require some remedial work to bring them up to current code, this is not thought to be a hurdle for motivated investors who are keen to secure prime space along the high-profile strip.
“This is quintessential Courtenay Pl and buildings like these underpin the wider Courtenay Quarter which extends down the side streets running off the main strip,” says Sherlock.
“With the strengthening project on the St James building progressing, big plans afoot for the Reading Cinema complex, and escalating apartment development in the surrounding area, the Courtenay Quarter is seeing substantial investment which shows confidence in the location.”
In its second quarter 2019 results report to investors, California-headquartered and Nasdaq-listed Reading International  talks of the temporary closure of its existing Reading Cinema and associated retail space in Courtenay Pl, and reinforces its commitment to redeveloping the site into an entertainment-themed urban centre after a poor seismic rating closed the hub.
Reading International describes Courtenay Pl as “one of the most vibrant and growing commercial and entertainment precincts of Wellington” and stresses that it is “currently working on a comprehensive plan for the redevelopment of this property featuring a variety of uses to complement and build upon the ‘destination quality’ of this location.”
The properties for sale could variously appeal to passive investors, add-value investors or owner-occupiers.
“If an investor chooses to buy both properties together, there could be considerable development potential down the line with a 27m (seven-level) apartment tower possible on the combined site,” says Smith.
Tenders close with Bayleys Wellington on  September 18. The property features in Bayleys’ latest Total Property portfolio magazine.