Six brand new retail units in Merchant Quarter, at the centre of Auckland’s fast-growing New Lynn, are on the market.
Colliers International has been exclusively appointed to market the units at 28-42 Totara Avenue for individual sale by auction at 1pm on Thursday, 19 October.
Five of the units are on long-term leases to established tenants, while the sixth is available with vacant possession, making it attractive to both owner occupiers and add-value investors.
Colliers International Investment Sales Director Tony Allsop, who is marketing the units with West Auckland General Manager Josh Coburn and Broker Cherry Higginson, says strong bidding is expected at auction.
“This is an exciting opportunity to acquire up to six retail investments with excellent exposure to a prime retail strip in Auckland’s fastest growing area,” Allsop says.
“The five investment units are remarkably affordable for such a high-profile location, with net annual rentals of between roughly $33,000 to $165,000 plus GST.
“The sixth unit is vacant and ready to fit out, giving owner occupiers a rare opportunity to establish a foothold in an unbeatable location.”
Allsop says Merchant Quarter is located in the heart of New Lynn’s growing commercial centre.
“This vibrant pedestrian-focused precinct comprises a mix of character buildings and new development offering shops, cafes, bars, restaurants, apartments and offices,” he says.
“The units for sale have been newly developed by Infratil, which has partnered with Auckland Council’s urban regeneration agency Panuku to enable the revitalisation of New Lynn’s former transport hub.”
Allsop says the development comprises an architecturally designed podium building with retail on the ground floor, three storeys of car parking offering 260 spaces, and an apartment block on top.
The second stage, completed this month, includes a further three levels of residential accommodation.
“The retail units for auction are part of an attractive, modern retail centre that has been subdivided into 11 tenancies, each on individual freehold titles,” Allsop says.
“Each unit benefits from excellent street frontage with aluminium joinery and floor to ceiling toughened glass.”
Coburn, who leads Colliers International’s West Auckland sales and leasing team, says Merchant Quarter is ideally located to capitalise on the area’s tremendous growth.
“The New Lynn Urban Plan, which maps out Auckland Council’s vision for the centre, envisions a unique, sustainable metropolitan centre with a world-class transport interchange.
“It predicts that some 20,000 people will live there by 2030, which is an increase of about 10,000 residents.
“The plan also projects 2,000 new jobs will be created, increasing the local workforce to 14,000 people.”
Coburn says the council recognises New Lynn among Auckland’s 10 metropolitan centres – a clear indication of its stature and growth within the context of the city’s spectacular development.
“Merchant Quarter is the oldest part of New Lynn, with a long history as a trade and retail hub,” Coburn says.
“Many heritage assets remain, including Ceramco House the former BNZ Bank building, and the precinct has become one of the most significant mixed-use redevelopment areas in Auckland.
“The precinct continues to offer many of the services expected of a town centre including a post office, police station, library, banks, community centre and numerous shops.”
Coburn says the construction of the New Lynn Transit Interchange, the extension of Clark Street, and the creation of new shared spaces along Totara Avenue West have significantly boosted existing businesses.
“Investment in local infrastructure has also opened up more opportunities for retail, including the units up for auction,” he says.
“The New Lynn Transit Interchange – a comprehensive public transport hub in the southeastern corner of the precinct – has been particularly transformational.
“Upgrades to the rail network have made New Lynn a short 11-minute ride to Auckland CBD, while dedicated bus lanes have cut travel times for frequent feeder buses.
“Five million travellers a year now pour through the precinct, and that number is set to increase as the area continues to grow.”
Coburn says the precinct still attracts strong road traffic, with more than 25,000 vehicles passing Great North Road every day.
“That traffic is fuelled in part by New Lynn’s status as the southern gateway to West Auckland, the Waitakere Ranges and the famed West Coast beaches,” he says.
“New Lynn acts as the service centre for a large area extending to Titirangi and Glen Eden to the west, Blockhouse Bay to the south, Avondale to the east and Kelston to the north.”
A catchment analysis found the area has one of the lowest median ages in West Auckland at 28 years, mainly due to its significantly higher proportion of 20- to 35-year-olds.
Higginson says the five leased units for sale all benefit from strong tenant covenant, fixed rental growth, periodic market rental reviews and long-term leases.
Unit B, tenanted to Lumino The Dentist, comprises 160sq m with frontage to McCrae Way. The unit is on a 10-year lease with two four-year rights of renewal, retuning $52,000 a year.
“Lumino was established in 2005, and now provides specialist dental care in more than 100 locations in New Zealand,” Higginson says.
Unit E, leased to Pita Pit, comprises 108sq m on the corner of McCrae Way and McCrae Lane. The unit is on a 10-year lease with two five-year rights of renewal, returning $42,301.44 a year.
“Pita Pit is one of New Zealand’s fastest-growing healthy food franchises, with more than 95 locations throughout the country,” Higginson says.
“The restaurant specialises in made-to-order quick service pita sandwiches.”
Units F, G and H, leased to Elegance Chinese Restaurant, offer a total area of 515sq m fronting Totara Avenue.
Higginson says the tenant is signed to a 10-year lease, with two 10-year rights of renewal, returning $165,426 a year.
“Established in 2015, the restaurant serves authentic, reasonably priced Cantonese food, with more than 100 steamed, deep-fried, sweet and savory dishes to choose from,” she says.
“The premises can seat up to 300 people, making it a popular venue for Yum Cha.”
Unit L, leased to Spicy Hot Pot, comprises 114.15sq m fronting Totara Avenue. The unit is on an eight-year lease, with two six-year rights of renewal, returning $33,060 a year.
“Spicy Hot Pot opened this year, offering a Southern Chinese dining experience packed full of spices. The menu includes barbecue and noodle dishes, as well as their popular milk tea.”
Unit N, leased to Vita Source Health and Nutrition, comprises 87.29sq m fronting McRae Way. It is on a six-year lease with two three-year rights of renewal, returning $34,333 a year.
“For more than two years, Vita Source has offered a one-stop, direct mail and retail service offering healthcare, skincare, and nutrition products, with a focus on natural health.”
Unit I, which is available with vacant possession, comprises 102sq m fronting Totara Avenue, next to Elegance Chinese Restaurant.
“Provided in a bare-shell basis, buyers have an opportunity to stamp their own mark on New Lynn and be part of the tremendous success story being written around them,” Higginson says.
“This is a rare opportunity for an owner occupier to position themselves in the company of reputable, nationwide brands.”
As well as Pita Pit and Lumino, nationwide businesses in Merchant Quarter include Mexicali Fresh, Esquires and Bay Audiology.
Higginson says each property will be auctioned individually, giving investors the opportunity to acquire one or all of these outstanding retail assets.
“We are expecting strong bidding, so this is an auction not to be missed.”