Property investors are increasingly looking to diversify their risk across both the residential and commercial markets and three easily digestible smaller offerings from Bayleys North Commercial will enable them to do just that.
A fishing shop, an office suite and a restaurant are up for sale in Albany and can be purchased for a similar cost to an average North Shore house.
The three properties, featured in Bayleys’ latest national Total Property portfolio, are generating net annual rental income of between $45,000 and $53,672 plus GST. This makes them very affordable for smaller investors, says Bayleys North Shore Commercial retail manager Damian Stephen.
“We are receiving increasing enquiry for commercial properties under or just over the $1 million mark from residential investors. This is partly being driven by a perception that the North Shore residential market is fully priced but also by the fact that it makes sense to spread your exposure across different property types.
“Commercial properties also come with fixed lease terms which provide more certainty of tenure than periodic residential tenancies. Tenants also pay outgoings such as rates, insurance and body corporate levies which means commercial property mostly offers a better net income return that residential.”
Stephen says commercial investors generally look for properties in areas of high population and business growth, which reduces tenancy risk, and Albany is one of Auckland’s fastest growing areas.
He and Bayleys North Shore Commercial colleagues Adam Curtis and Adam Watton are marketing one of two units for sale in the Rosedale Plaza, located in a high profile position on the corner of Rosedale Rd and Henry Rose Place in the North Harbour Industrial Estate.
Unit 8, 215 Rosedale Rd comprises just over 200m² of retail, mezzanine office and warehouse/storage space with rear roller door access and also comes with four exclusive external car parks. It is returning annual net rental income of $45,000 plus GST
“It is occupied by West Shell a specialist fishing equipment and apparel retailer which also has a shop in Dunedin as well as an on line sales business,” Adam Curtis says. “There is a five-year lease from September 2016 with two three-year rights of renewal which if exercised would take the tenancy through until August 2027.
“With vacancy rates across this area at historical lows, tenant demand has stimulated significant rental growth for units of this nature which is yet to be recognised,” says Adam Watton. “This demand, lack of greenfield development sites and the increased cost of construction all adds up to an affordable opportunity that you will struggle to replace in the future.”
The unit will go up for auction in Bayleys’ next Auckland Total Property auction on September 19, unless sold prior.
Also for sale is Unit M, 215 Rosedale Rd comprising a 235.5m² first floor office suite in the Rosedale Plaza, generating net annual rental income of $46,500 plus GST. It is being marketed by Tonia Robertson and Jane McKee and is for sale by deadline private treaty, closing 4pm, September 20, unless sold prior.
The office unit is tenanted by The Insurance Group which has been in occupation since 2014 with a current lease running until April 2019 and one further two-year right of renewal. Established in 1995, it provides a wide range of private and business insurance services.
The unit comprises a mix of open plan and four executive partitioned offices, a central boardroom with doors opening onto the reception area, a kitchenette, storeroom and toilet and bathroom area.
“The good quality partitioning features full height glazed panels on a number of the internal walls,” says Tonia Robertson. “The high window to floor area ratio allows excellent natural light throughout the unit enhanced by its front corner position in the Rosedale Plaza.
“The premises enjoys excellent prominence to Rosedale Rd, one of Albany’s main roads, with substantial signage exposure possible to a high volume of passing traffic. There is also good profile visibility to the central courtyard of the plaza.”
Rosedale Plaza was completed in 2003 and comprises 13 units ranging in size from 130-450m² with a diverse mix of longstanding tenants which include a Korean restaurant and Fat Boys BBQ restaurant and bar.
“The L-shaped building faces onto a substantial central car parking area and was positioned to provide maximum
signage exposure and prominence for all units within the complex, particularly to Rosedale Rd,” says Jane Sims. “This is a principal thoroughfare linking the East Coast Bays and the Tawa Drive motorway interchange through to the North Harbour Industrial Estate”
Sims says excellent access to the northern motorway complex is available via the nearby Tawa Drive/Greville Rd interchange or alternatively Upper Harbour Drive to the south.
The third Albany property for sale is Unit 7A, 21 Corinthian Drive, which is an 87m² unit in the Orchard Park Retail Hub with a 10-year lease from September 2017 to Double Happy Chinese restaurant plus two three-year rights of renewal. It is producing net annual rental income of $53,672 plus GST with an upcoming rent increase based on the Consumer Price Index due in September.
The offering is being marketed by Meng He, Steven Liu and Eddie Zhong and will also be part of Bayleys’ Auckland Total Property auction on September 19, unless sold prior.
“This is an excellent opportunity to secure a well-positioned property in a high-exposure retail complex facing Albany Highway,” says Meng He. “It is located on a highly visible corner site next to the main entrance to the Orchard Retail Hub. There are multiple access points and ample car parking and a wide range of surrounding tenants including banks, lawyers, a childcare centre as well as a wide variety of other business occupants.”
Steven Liu says the unit is part of one of the biggest convenience retail centres developed on the North Shore in recent years. Orchard Park Retail Hub which opened last year has 16 units with 94 common car parks and is the final stage of a two-part development undertaken by Northbridge Properties. The neighbouring first stage of the project, the Corinthian Retail Centre at 14 Corinthian Drive, has 14 units and 54 shared parks.
He says nearly all of the units were sold off the plans or during construction by Bayleys North Shore Commercial to a mix of owner occupiers or investors who have subsequently leased the premises. The units are occupied by a variety of predominantly food and beverage outlets with some other essential service retail providers.
“This has been a very successful project which has met with strong uptake from the market because of its high exposure positioning, with triple frontage to Albany Highway, Corinthian Drive and Data Way, as well as a wide commercial catchment and a significant population base from which to draw customers.”
Bayleys achieved a 75 per cent clearance rate at its latest Total Property auction in Auckland with six out of eight commercial and industrial offerings selling, including all three North Shore properties put up for auction.
Generating the most bidding at the auction was a 90m² café in a high profile corner position in a retail complex in Albany, marketed by Laurie Burt and Eddie Zhong. Bidding on Unit 6, 56 Apollo Drive on the corner with Arrenway Drive, started at $750,000. It was declared on the market by auctioneer Richard Valintine at just over $900,000 meaning it had exceeded its
reserve price.
A long sequence of bids from three competing parties then followed, with many $1000 increases, before the hammer finally came down at $991,000. This represented a 4.99% yield on the $49,500 of net annual rental income currently being generated on its six-year lease to Duck Goose café.
The café has been in occupation since the complex, comprising 13 retail units, a childcare centre and 73 common carparks, was completed in 2016 by Kea Property Group.
Another unit titled offering in Albany, Unit B 12 Parkhead Place in the North Harbour Industrial Estate fetched the highest price of the day. The 627m² industrial premises plus 12 car parks sold with vacant possession for $1.945 million through Matt Mimmack and Laurie Burt.
Built in 2005, the property has 394m² of warehousing accessed by three roller doors with a speed wall splitting it into two tenancies and two levels of air conditioned offices and amenities at both ends of the building.
The other North Shore property to sell was Unit 5, 160 Wairau Rd, Wairau Valley, a 59m² unit in the Wairau Junction Retail Centre marketed by Terry Kim and Matt Lee which went for $415,000 at a 6.02% yield
Located at the rear of the centre, which underwent a major refurbishment four years ago, it is leased to Indian takeaway Spice Cuisine for 10 years from 2013 with two five-year rights of renewal.
Bayleys North Shore Commercial
Devereux Howe-Smith Realty Limited, Bayleys, Licensed under the REA Act 2008
D +64 9 489 0999 | F +64 9 489 0990
29 Northcroft Street, Takapuna, Auckland 0622
