A large modern bulk retail complex in central Papakura, which is producing net annual rental income of close to half a million dollars, is one of the larger commercial and industrial properties being put up for auction later this month as part of Bayleys’ latest Total Property commercial portfolio.
Located on a 6319sqm site at 2 and 6 Railway Street West, Papakura, the fully leased freehold property comprises two buildings developed in the mid 2000s and totalling 3118sqm, one of which accommodates three tenants while the other is occupied by the remaining four tenancies.
The property is being marketed as one lot by Peter Migounoff and Piyush Kumar,
Bayleys South Auckland is among 20 Total Property offerings which will be auctioned on May 20, unless sold prior to the auction.
“In my view, it’s the best, most modern retail complex in Papakura, which was built to a high standard; it was recently assessed as having an A+ seismic rating,” says Migounoff.
“The property’s multiple, mostly national retail brand tenants, provide a substantial rental cash flow of approximately $497,573 per year and the high profile location ensures massive exposure for them.
“The property is strategically positioned in Papakura’s central business district in an area that is dominated by strip retail, with neighbouring tenancies including a Countdown supermarket which is located directly opposite. The Papakura train station, the region’s third busiest after Auckland and Newmarket, is on the other side of the property.”
The largest of the property’s seven tenancies is a 662sqm Noel Leeming bulk retail outlet. The national retailer, which is now wholly owned by The Warehouse Group, is one of the property’s original anchor tenants and has been there since 2004. It has exercised the first of three rights of renewal following its initial six year lease.
It shares one building with a 587sqm Number One Shoes store, which has been there since 2005 and has exercised a six-year right of renewal, and a 450sqm No. 1 Mart, which commenced a four year lease in July last year and has two four-year rights of renewal.
One of the centre’s other original occupants Brandy’s Café is located in a prime corner position in the other building, directly opposite a pedestrian crossing which leads to and from the Countdown supermarket.
The initial lease of its 151sqm premises was for nine years from 2004 and has been extended for another nine years through until mid 2022. Migounoff says the café benefits from high volumes of pedestrian traffic past its front door and to make the most of this is open for dinner as well as being open during the day.
The other tenants in this building are a 355sqm Liquorland premises which has renewed its six-year lease from 2005 for another six years and a 516sqm Cash Converters store and Ray White real estate outlet, which are on relatively new leases running for six and eight years with rights of renewal. Migonouff says Ray White took over a 435sqm tenancy from Housing Corporation and has fitted it out to high standard for use as its flagship premises and auction rooms for the Papakura area.
The two buildings are surrounded by 68 common car parks on two separate titles. “This provides the next owner with the flexibility to sell one or both buildings individually at some stage in the future. In the meantime, the property is providing an excellent spread of risk across a range of lease expiry dates in 2017, 2018, 2020, 2021, and 2022, with right of renewals on top of that. The fact that a number of the tenants have chosen to exercise their first right of renewal suggests that the location is working well for them,” says Kumar.
The property’s surrounding catchment area is a growing one which will expand further as Papakura benefits from the Auckland Housing Accord’s Special Housing Areas.
“There are thousands of residential sections planed all around Papakura and dwellings already under way. There are also large blocks of land with a Future Urban zoning under the Proposed Auckland Unitary Plan, which are likely to be developed for residential use longer term, which will further expand the customer base for Papakura retailers,” concludes Kumar.