The opportunity to acquire two quality commercial investment properties on long leases has emerged with the proposed sale of Units 3 and 4 in The Park Megacentre, Hastings’ brand new bulk retail centre.
The centre is located at 530 Karamu Rd and is anchored by The Warehouse and Mitre 10 Mega. Units 3 and 4, occupied on long leases by Fishing Camping Outdoors (FCO) and Angkor Wat Kiwi Bakery and Cafe, are being marketed by Jude Minor and Tony Allsop of Colliers International. They are for sale by deadline private treaty closing on August 2.
Minor says the units are currently on one freehold strata title, although a process is underway to subdivide them into two individual titles. They are therefore being offered for sale either individually or together.
The properties offer secure cash flows and a prominent location, says Minor. “The long term, solid tenant covenants in place provide income security, with income growth built in through annual rent reviews.”
The location, in central Hastings’ retail hub, constitutes a prime site which is very popular with retailers and shoppers, so the tenancies would be attractive for a wide range of tenants should vacancies arise in the future, he says. “The properties are also brand new – having been constructed in February this year – so they are low maintenance, designed to modern earthquake standards and of very good quality.
“We believe these properties are ideal for a variety of investors – family trusts, small syndicates or individuals – who want to take advantage of low interest rates and diversify into commercial property,” he says.
The two leases provide a combined net annual rental income of $371,726.
FCO occupies 1403m² of net lettable area on an eight-year term dating from March 2012, with the right to renew for two further terms of seven years each, giving a possible final expiry of March 2034. Annual rent reviews of 3.5% are in place.
Allsop says FCO’s parent company, Super Retail Group, is listed on the Australian Stock Exchange, providing a very strong tenant covenant. “The FCO chain launched in New Zealand in 2011 and now operates 13 successful stores throughout the North Island, with Hastings the newest addition.”
The stores offer New Zealand’s largest range of fishing, camping and outdoor gear from brands such as The North Face, Columbia and Merrell.
Angkor Wat Kiwi Bakery occupies a 150m² tenancy with outdoor seating and an adjoining playground. The bakery holds a seven year lease with the right to renew for two further terms of four years each. Annual Income growth is provided through fixed rental increases.
The bakery operators have successfully owned and managed other bakeries in Waipukurau and Napier, which they have sold in order to focus on their new venture at The Park Megacentre for which they have invested in a very high quality fit out, Minor says.
The Park Megacentre occupies a strategic block within central Hastings, with large street frontages providing excellent street profile, Minor says.
The centre opened in September 2011 and is intended to provide 25,000m2 of retail space and 780 on-grade car parks when fully developed. Other large-format retail tenants in the vicinity include Noel Leeming and Bunnings.
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