Brokers say a newly redeveloped property in Auckland’s prestigious Mount Eden Village is an opportunity not to be missed.
The 378sqm freehold property at 395 Mount Eden Road is for sale by auction on 12 October 2016 unless sold prior. It returns a total net rental of $195,000 per year plus GST and has a weighted average lease term of over six years.
Colliers International broker Peter Kermode, who is marketing the property along with colleagues Adam White and Gawan Bakshi, says that the property’s recently refurbished modernised fitout and strong tenant covenant makes this an excellent investment option.
“This is a great opportunity for a family trust or an individual investor in one of Auckland’s most iconic suburbs. The property commands a prominent corner site at the northern gateway to Mount Eden Village and offers unparalleled exposure and excellent access to street parking,” says Kermode.
“The property is north facing and comes with an outdoor dining area. It houses two tenants and includes an APN outdoor billboard. The tenants are Kebab Stop, which is best known for its ‘institution’ status in Mount Eden, and Corner Burger,” says Bakshi.
Corner Burger is on an 8-year lease term commencing 7 March 2016 and has rights of renewal for two 6-year terms which include a market review every four years and annual Consumer Price Index reviews commencing after the first market review. It returns $120,000 per annum plus GST.
Kebab Stop is on a 6-year lease commencing 1 December 2014, with one 6-year right of renewal, and includes a biannual rent review from 1 May 2016, currently returning $45,000 per annum plus GST.
“The APN outdoor billboard lease commenced on 1 April 2013 and is for a term of 5 years with two 5-year rights of renewal. The rental was recently reviewed to $30,000 per annum with further reviews at each lease renewal date. The three rental streams combine to provide diversification and split-risk income.” says White.
“It’s on a broad northern boundary and is arguably one of the best corner sites in the Mount Eden retail strip which sees 15,000 cars go past every day, giving it a competitive edge over other properties,” he adds.
“Mount Eden is well known as a sought after inner city suburb with a small but vibrant community. This provides businesses located within the strip with an active and stable customer base, and the property’s positioning on a strategic corner give it additional profile and exposure,” says Kermode.
The property services an affluent demographic within Auckland and sits within 2kms of the prestigious Auckland Boys Grammar school. “It’s only 4.5km to down town Auckland, 1km to Mount Eden Reserve and sits amongst a cluster of successful, longstanding hospitality offerings including De Post Belgium Beer Café, Frasers Café, Circus Circus Café, Mantells and Molten,” says Bakshi.
The property was purchased by the current vendor in early 2014 and was tenanted by Kebab Stop and a local dairy. Since purchasing the property, the vendor has signed a new lease with Kebab Stop and substantially redeveloped the entire building, replacing the dairy with Corner Burger.
“The property’s current zoning is Business 2, which will be changed to Local Centre under the Unitary Plan, and offers the potential for a variety of future uses including residential. This zoning allows for multi-level developments and thoughts about future development could include ground floor retail with a mix of office and residential space at the top. But this would have to be after the completion of the current lease terms,” says Kermode.
“Mount Eden is experiencing incredible change and this property will see all the benefits. It is only 1.8kms from SH1 northbound from Gillies Ave and 2.2kms away southbound from Market Road,” says Bakshi.
“Ground breaking residential developments in the area include Botanica, and Botanica Heritage, and Eden Park is only 1.8kms to the west. Mount Eden Train Station is also earmarked for a major refurbishment under City Rail Link plans,” White points out.