Retail site best block in the bay

5:00 AM Saturday December 6, 2014 Colin Taylor

A United Video store and Westpac bank are among the tenants in this retail block for sale at 507-509 Blockhouse Bay Rd.

An Auckland suburban retail block with six tenants and significant opportunities for development is for sale for the first time in 20 years on a premium corner location near the Blockhouse Bay shopping centre.

Marketed by Adam White and Oscar Kuang of Colliers International, the single titled, 1158 sq m property at 507-509 Blockhouse Bay Rd will be auctioned at 11 am on Tuesday, December 16 at Colliers’ auction room at 151 Queen St, Auckland, unless it sells earlier by negotiation.

 “Quality, multi-tenanted, suburban retail and commercial investments like this, with excellent histories of occupation, are always very popular with buyers,” he says.

 “With a well-established mix of retail tenants, and a net rental return of $164,917 a year, this investment offers a solid, diversified income stream in a price bracket which is accessible to a large number of individual investors.

“The freehold property has a large car park of about 400 sq m housing 16 vehicles which is a convenience benefit for customers and also presents a potential opportunity for development.”

White says the current site coverage is at 60 per cent but an allowance of up to 80 per cent of site coverage is flagged under the Proposed Auckland Unitary Plan.

“An add value scenario of this magnitude broadens the property’s appeal to a much wider range of investors. The proposed zoning also provides for multiple activities including commercial, leisure, residential, cultural, community and civic services, adding to the significant flexibility for development of this property.”

The building has a net lettable area of 720.6 sq m with the majority of the building at road level. It encompasses an 80 sq m second level space housing technical equipment for telecommunications company Vodafone and broadband internet provider Woosh which operate aerials from the property’s roof. 

Other tenants include a Westpac Bank branch occupying 272 sq m; a physiotherapy service, a barber, and a United Video store leasing 286 sq m which incorporates an ice cream shop and Lotto dairy.The leases for the two major tenants, Westpac and United Video, do not expire until 2020.

“The property has recorded no vacancies for the past 15 years which proves the attractiveness of this location along with the presence of commercial banks like the ANZ and ASB just a few metres along on the same side of the road.”

Kuang says the wide corner site fronting both Kinross St and Blockhouse Bay Rd offers good profile and signage opportunities to the tenants with 14,000 vehicles passing daily. It is also only a 20 minute drive to the Auckland CBD.  

“There is also potential for the rentals to be raised to bring them in to line with current market rents, providing a short term income growth opportunity,” he says.

The building is on Business 2-zoned land, designed for suburban shopping and dining activities, with a maximum development height of nine metres. Under the proposed Unitary Plan, the site would be zoned Town Centre, a designation applying to centres on main arterial roads, which provide good public transport access.

“The large established surrounding residential catchment, the affordable rentals and the main road location of the shops means they will always be popular for a range of retail occupiers,” Kuang says.

John Bowring, national auction manager at Colliers International, says the opportunity to buy an accessibly priced commercial property with excellent fundamentals should attract a big crowd on auction day.

“We’ve had 191 auctions so far this year with a great clearance rate of 70 per cent,” Bowring says. “We expect the property to appeal to investors from the wider Auckland region and around the country who are looking for affordable, established investment offerings with diversified income streams.”