New Lynn retail complex ripe for redevelopment
The property at 2 Margan Avenue comprises a 3,556sq m suburban shopping centre with eight retail units, 65 car parks and two income-producing billboards.
It occupies an 8,157sq m freehold site with about 100m of frontage to Margan Ave and some 60m to Titirangi Road – the main route to popular Titirangi as well as Waitakere’s iconic surf beaches.
Business Mixed Use zoning allows for intensive redevelopment of up 16m in height, with a range of uses including retail, residential, commercial or a mix of these.
Colliers International is marketing the property for sale by deadline private treaty closing on Wednesday 28 August, unless it is sold earlier.
Gareth Fraser, Auckland Director of Investment Sales, says the property provides multiple options for add-value investors, land bankers and developers.
“This is a chance to secure a high-exposure property with holding income and a site layout that is well-suited to staged redevelopment.
“Due to its redevelopment potential, the existing owners have not focused on leasing vacancies or maximising terms with existing tenants.
“This presents an opportunity to negotiate these terms to maximise the holding income, which currently sits at $610,562.67 net per annum, after operating expenses.
“A combination of re-leasing and staged redevelopment would allow a new owner to generate more rental income pending future redevelopment.”
West Auckland Broker James Appleby says Margan Ave is well located in the rapidly growing New Lynn residential and retail area.
“Located 10km southwest of Auckland’s CBD, the suburb has benefited from significant public and private investment.
“It is a popular retail destination with a number of large national brands including Bunnings, The Warehouse and Mitre 10 Mega.
“Kiwi Property’s LynnMall shopping centre, 1.2km from the Margan Ave property, was recently extended and refurbished to add a cinema complex and the new Brickworks dining precinct.
“Another notable nearby development is West Edge – a new master-planned housing precinct being built by major residential developer Avanda.
“Located on a 11.3ha site formerly occupied by the iconic Crown Lynn potteries, it will comprise a mix of terraced housing, apartments, retail space and community facilities.”
The Margan Ave property is a u-shaped retail complex comprising eight strata-titled units. The vendor is offering the entire unit entitlement to the market.
Built in 1989, the steel structured building sits predominantly on concrete masonry block foundations and is clad with aluminium sheeting and glazed frontages. It is primarily single level, with some first-floor areas.
The building is positioned near the eastern boundary of the site, which spans two lots.
The western corner of the site comprises 65 marked, sealed car parks accessed via a main entrance on Margan Ave.
A second entrance provides access to the significant staff parking and loading areas, with most of the units being serviced by roller doors at the rear.
Blair Peterken, Director of Colliers’ Capital Markets team, says the property has six tenants plus additional income from two billboards.
“The retail complex is anchored by a 24-hour gym, Just Workouts, as well as a Chipmunks playcentre and a Salvation Army charity shop.
“These leases are supplemented by a laundromat, a fresh fruit and vegetable shop, and a maths tuition service.
“The lease terms range from three to 10 years, allowing for staged redevelopment of the site upon expiry. Rental reviews are a mix of market, fixed, CPI or various combinations of these.
“There is a single 103sq m retail tenancy on a 12-month vendor underwrite, providing income while a new owner secures a new tenant or finalises redevelopment plans for the site.
“Additional income is provided by the billboards, which are leased by Phantom Billstickers and Just Workouts on terms of one and two years respectively.”
Josh Coburn, Director of Colliers’ West Auckland and Site Sales teams, says the property’s well-established location, coupled with favourable zoning, makes it an obvious future redevelopment prospect.
“The site would suit a variety of uses including retail, commercial, residential or a mix of these.
“Potential buyers are encouraged to look to maximise existing buildings and service infrastructure, perhaps looking to extend or supplement refurbished retail spaces with higher value residential development.
“Recent development of townhouses in the immediate vicinity provides evidence of strong demand for residential development, while the rarity of Mixed Use zoned land in the area offers vast potential for retail enhancement.
“At market yields, much of the property would be supported by land value.”