A freehold standalone building anchored by McDonald’s is expected to draw intense interest from commercial property investors as it goes up for sale on a prominent town centre site in South Auckland.
The refurbished single-storey property for sale at 194 Great South Road, Papatoetoe, occupies a high-profile corner location on South Auckland’s major arterial route. Diversity with multiple tenancies including McDonald’s and Westpac Bank generate total net rental income of $330,348 plus outgoings and GST per annum.
Colliers has been exclusively appointed to market 194 Great South Road, Papatoetoe, Auckland for sale by auction at 11am on Wednesday 2 June, unless it is sold prior.
“McDonald’s occupies approximately 328sq m of the property for its restaurant, paying net annual rent of $147,313 plus outgoings and GST on a lease running through to 2027. One ten-year and two further five-year rights of renewal, if taken up, will extend the expiry to 2047,” says Chand.
Another 63sq m of office space is also occupied by McDonald’s, generating $7,072 plus outgoings and GST per annum, on a separate lease that runs through to 2023 with a further four-year right of renewal.
“McDonald’s is a global tenant of the highest quality. The world’s largest restaurant chain by revenue, it serves a million Kiwis a week at 167 restaurants across New Zealand and has 30,000 restaurants globally serving meals to 50 million people daily.”
Westpac Bank leases approximately 272sq m for its Papatoetoe branch, paying net rent of $123,462 plus outgoings and GST per annum on a current lease which runs through to 2024, with two further three-year rights of renewal.
“More than 1.3 million New Zealanders bank with Westpac. The ASX-listed company has operated in this country since 1861 and is well established as one of New Zealand’s ‘Big Four’ banks.”
The remaining area of some 104sq m is leased to Finesse Creations, trading as Apsara, a wholesaler, supplier and retailer of Indian ethnic women’s fashion clothing which pays net annual rent of $52,500 plus outgoings and GST. Its current lease extends until 2023 with three further three-year rights of renewal.
“With such diverse, high-calibre tenants in place on long leases, with built-in rental increases and significant rights of renewal, this property represents an investment proposition of rare quality,” says Chand.
“Developed by highly-regarded Argyle Estates and recently fully refurbished, the building is supported with 19 on-site car parks to the rear along with easy access for the busy McDonald’s drive-through.
“With high-visibility corner frontage at the intersection of Great South Road and Charles Street, the property has exposure to 20,000 passing cars daily on South Auckland’s key arterial route.”
Prentice says the property’s location and planning status provide it with considerable long-term development potential.
“The site’s Business – Town Centre zoning supports growth and intensification, in acknowledgement of its location on a main arterial route with good public transport.
“The zone provides for numerous activities, from commercial and residential to leisure, cultural and community uses. The Great South Road site has an allowable building height limit of 18 metres,” says Prentice.
Matthew Barnes, Investment Sales Director at Colliers, says the immediate surroundings include predominantly local retailers, banks, and real estate firms along Great South Road. Just opposite the site for sale is Hunters Plaza, a sub-regional shopping centre anchored by Countdown and Kmart, along with Noel Leeming and 52 other tenancies.
Barnes says the area has been identified as a priority location for regeneration by Auckland Council’s development organisation Panuku.
“Recent progress has been made in revitalising Papatoetoe, including the development of a new supermarket and civic space and an upgrade of the town centre car park.
“South Auckland is experiencing strong residential growth, with significant new development taking place in Papatoetoe, Papakura and Takanini. The property at 194 Great South Road is in a prime position to tap into and benefit from ongoing urban and commercial growth,” says Barnes.