Strong demand from tenants and investors is steadily soaking up space in new North Shore retail developments and pushing up rentals, says manager Michael Block, Bayleys North Shore Commercial retail manager.
Block says the agency’s specialist retail division is marketing a variety of new projects in Albany, Browns Bay and Hobsonville, which are meeting with a good response from the market.
He says much of the development is taking place in Albany where considerable future residential and commercial growth is expected to occur. “There has been a significant amount of commercial sales and leasing activity following the freeholding of some large former leasehold Albany land holdings and also helped by the economy maintaining a decent head of steam.
“Near the Westfield Shopping Centre, Goodman Group is leading the development of Orchard Park which will comprise a mix of office, light industrial and retail buildings; while in Albany’s town centre the Chinese funded $300 million, 800-apartment Rose Garden complex is also under way.
“Several retail convenience complexes such as the Corinthian Retail Centre, the Rosedale Retail Centre and The Foundation have taken shape over the past two years and we have been involved in the leasing and sale to both owner occupiers and investors of most of the units in these centres.”
Block says both businesses and investors are looking for opportunities in Albany because of its long-term growth prospects and the new complexes have attracted a mix of international, national and local retailers.
“A number of retail premises have occupants targeting the substantial Asian community in Albany such as the leading Chinese supermarket chain Tai Ping. The store anchors the Rosedale Retail Centre in the Interplex Business Park that has been developed by a well-known North Shore company, Northbridge Properties.
“These occupants add ethnic diversity to the centres and attract Kiwi shoppers as well because of the variety of goods they offer,” says Block. “The ‘sold up’ sign has gone up on stage one of the Rosedale Retail Centre development and we have sold a number of units, both vacant and tenanted, to local Asian investors because they have a strong preference for smaller retail units.”
All of the 17 units anchored by the 1800sqm Tai Ping supermarket have sold and only three are left for lease ranging from 78 to 83sqm.
“The bulk of the units in the 20 unit stage two stage of the Rosedale Retail Centre have been sold off the plans as well,” Block says. “It encompasses units from 65 to 229sqm targeted at retail or service sector occupants with rentals set at $450 per sqm for the retail and showroom space. The units left for purchase range from 101 to 240sqm.”
Eddie Zhong, also a Bayleys’ North Shore Commercial retail specialist, says the Rosedale Retail Centre development is north facing and ideally located on the fringe of both a commercial and industrial business park and close to modern residential housing subdivisions.
Damian Stephen, Bayleys North Shore retail specialist, says the Corinthian Retail Centre, which is part of the 12ha Orchid business park development located between State Highway One and the Albany Expressway, has also attracted strong interest from retail businesses and investors.
Goodman Group selected Northbridge Properties to undertake the Corinthian development and sold the firm a block of land to facilitate it.
Stephen says 12 out of 14 of the units in the complex, ranging in size from 66 to 115sqm have been sold to owner occupiers or investors and are occupied by a mix of food and beverage businesses and essential service retailers. Only three units are still available for lease, ranging from 84 to 141sqm.
Northbridge Properties has also now started on stage two of the development to be known as the Orchard Park Retail Centre, a three building complex encompassing 15 units.
Stephen says a boutique supermarket and/or a bulk retail tenant is being sought for one of the buildings totalling 995sqm with the other tenancies ranging in size from 71 to 321sqm. The units are available for lease or purchase and Stephen says the combination of strong demand for the stage one units and an increase in construction costs has resulted in rentals being increased from $450 per sqm to $550 per sqm.
Block says the retail centres were included in the Orchard Park mix to enhance the amenity value of the park for its business occupants and for this reason a childcare facility, licensed for 125 children is being developed on an adjacent piece of land. This is for sale with a new 12 year lease to experienced childcare operator Kids Cove which will produce initial annual net rental income of $325,000 plus GST. A covenant restricts the development of other childcare facilities at Orchard Park.
Other retails units which Bayleys is marketing in Albany include three units ranging from 110 to 119sqm for lease only on the ground floor of the 41 unit Tenor Apartments complex and nearing completion at 40 to 42 Library Lane (they are located on a high profile site on the corner with Dairy Flat Highway, one of Albany’s busiest thoroughfare roads); a new development on the island corner opposite North Harbour Stadium at 287 Oteha Valley Rd with two units of 73 to 100sqm for lease, one of which may suit a medical tenant (undertaken by Wallace Developments, the complex is anchored by a Z service station); and a recently completed retail convenience centre, The Foundation, at 270 Oteha Valley Rd, which has a number of national and international brand tenants, has three units for lease with space of 96.5, 193 and 396.5sqm long with a 128sqm unit for sale or lease.
Further east, a six unit development at 38 to 42 Clyde Road, Browns Bay, located opposite a recently opened New Word supermarket and involving a redevelopment of the former Farmers’ building, is being fitted out for tenancy occupation.
Block says Browns Bay is undergoing a revitalisation with both of the big supermarket chains plus an Asian supermarket having recently opened new or redeveloped stores. He says the new Clyde Rd development, on the corner with Inverness Rd, which is for lease only, has met with strong response from tenants with global cafe brand Coffee Club the first to move in. Other tenants to sign up include a restaurant, beauty salon and a toy store with a Lotto outlet. Block says the remaining 187sqm tenancy still to be leased could suit another complementary bar or restaurant or a national tenant looking to establish a presence in Browns Bay.
Retail developments are also appearing in northwest Auckland to service growing populations and business activity in these areas.
In Hobsonville, two units are all that are left of seven units for lease on the corner of Hobsonville Point Rd and De Havilland Rd East in the midst of the huge residential development that is taking place. Hobsonville Point Primary school is directly opposite with the popular Catalina Cafe just around the corner.
Block says the retail units are targeted at food and beverage, a general practice medical centre, pharmacy, a cafe and general retail tenants which are complementary to the area and the apartments above.