A retail investment property in popular Browns Bay on Auckland’s North Shore, which also offers the possibility to be redeveloped in the future, has been placed on the market for sale by auction.
14 Clyde Rd, Auckland is being marketed by Deborah Dowling and Euan Stratton of Colliers International’s North Shore office. It is scheduled to go under the hammer on Wednesday August 29 at 151 Queen St, Auckland, unless it sells before the auction date.
The substantial freehold retail property, which is included in Colliers International’s latest National Portfolio magazine, is on a 764sq m site on Browns Bay’s main shopping strip. It offers an “excellent opportunity to own quality commercial property in a fast-growing suburb”, Dowling says.
The property is tenanted by discount retailer Sunny’s Variety Stores, generating $158,790 in annual net rental income.
Dowling expects the potential to add value to the property to be attractive to buyers considering redevelopment in the future, and says there is also the potential for rental growth in the short to medium term.
“Redevelopment of the property, subject to relevant consents, could add significant value and also improve the property’s income stream,” she says. “With zoning allowing developments of up to nine metres, the future owner could potentially create a mixed-use development, including both retail and office.
“Rarely does a retail property of this size and calibre, surrounded by national and international retailers in a busy shopping area, with future development potential come to the market.”
Property and tenant
The 1970s building contains almost 750sq m of floor area across one and a half levels. It was previously home to a BNZ branch and was significantly refurbished in 2009 after the bank moved out, Stratton says.
“The building now provides open-plan retail space on the ground floor, with further offices, amenities and storage areas upstairs. The building also benefits from both front access for retail customers and rear access for loading or future entry for redevelopment options.”
There are six on site car parks to the rear of the building and plenty of public car parks surrounding the site, including a public car park backing onto the building.
“Sunny’s Variety Stores operate five other North Island outlets: in Mercury Bay, Whangamata, Mt Maunganui, Paeroa and Wanganui. The company has been operating since 1995 and is a successful discount retailer selling a wide range of products”, says Stratton.
The property’s single, stable tenant provides a passive investment with minimal management, he adds.
Sunny’s Variety Stores’ lease expires in October 2015, with the right to renew for two further terms of six years each.
John Bowring, Colliers International’s national auction manager, says the property presents a “desirable opportunity”: a passive, ‘hands free’ retail investment in an affordable price bracket.
“This freehold offering is an opportunity that should not be overlooked as a future-proofed income generating investment. It has the potential to be a great little earner and is a conservative investment holding suitable for a wide range of investors.”
Business 2 zone
The site is zoned Business 2 , which under the Auckland Council District plan aims to manage suburban centre activities in such a way which helps minimise average vehicle trip lengths, mitigates any adverse effects of business activity on surrounding residential areas and ensures that new developments integrate well with existing developments. Key policies include enabling substantial retail provision in suburban centres including food outlets, as well as enabling a wide range of other business activities.
Location
“The property is situated in a high profile location surrounded by a fast-growing, affluent residential catchment,” Dowling says. “The property is in an excellent spot which benefits from the pedestrian and vehicle traffic volumes passing along Clyde Road.”
Clyde Road is at the centre of the well known and established Browns Bay shopping precinct, which is home to well known brand-name tenants such as ANZ, OPSM, Flight Centre, Pizza Hut, Paper Plus, Westpac, ASB and many more.
“Although Browns Bay is a coastal suburb, it also benefits from good motorway and public transport links making it a sought after location among retail and commercial tenants. This has fuelled significant recent development,” Stratton says.
“In recent years, several low rise apartment developments have been introduced into Browns Bay with the aim of revitalising the area for population growth,” he says. “Future development along Clyde Road is also on the cards, which will further open up the commercial precinct to the popular beachfront.”
“Browns Bay also benefits from good motorway and public transport links and is only 19km from the Auckland CBD – approximately a 20-minute drive off-peak,” says Stratton.
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