Global brand Wendy’s is the long-term tenant in a newly-refurbished property in the Auckland city-fringe suburb of Royal Oak, due to go under the hammer next month.
The 1,923 sqm freehold site, including a standalone purpose-built Wendy’s building with a net lettable area of 289 sqm, at 702 Mount Albert Road, Royal Oak is being marketed by Jonathan Lynch and Peter Kermode of Colliers International. It is for sale by auction at 11am on March 16 at Colliers’ auction rooms at 151 Queen St, unless it sells prior.
With a strong tenant covenant and attractive lease terms, the property will appeal to ‘hands-off’ investors with a long term view seeking a "rock-solid passive investment", Lynch says.
“Wendy’s is a global fast food restaurant brand with over 6,600 restaurants worldwide, and the family-owned New Zealand chain has been a long-standing tenant on the site.
“In August last year, the company signed a 15-year lease with two rights of renewal of eight years – bringing the lease’s final expiry date to July 2046.”
The site generates a net passing income of $162,500 plus GST annually, with rent reviews every three years linked to market rent, Lynch says.
“Further underpinning the long-term viability of this investment is the building itself.
“It is a good-sized standalone restaurant of solid masonry construction, which was refurbished extensively over the past few months and is now immaculately presented with a brand-new fit-out.
“Also, an Initial Evaluation Procedure (IEP) assessment indicates an overall seismic rating of 100% of New Building Standard (NBS), an excellent rating and well above the 34% threshold for potentially earthquake-prone buildings.”
In addition to the A-grade tenant and excellent lease structure, the property’s location is another significant drawcard, Kermode says.
“The site sits between a Z Energy service station and the Royal Oak Mall - a mid-sized local shopping complex anchored by Pak’n’Save which includes over 60 shops, including well-known retailers such as ANZ Bank and Whitcoulls.
“This property encompasses a high profile site in a sought-after location along Mount Albert Rd, with significant exposure to 20,000 passing cars daily.
“When it comes to key attributes that property investors are looking for, these ones are extremely hard to beat.”
The property is a flat site with the purpose-built Wendy facility to the rear, as well as a drive-through and 30 carparks.
Currently zoned under the District Plan Isthmus Section as Business 8, the site sits within the Business Town Centre zone as defined by the Auckland Council Proposed Auckland Unitary Plan, Kermode says.
“Business town centre zones are the primary location for growth of commercial activities and reinforce the role of town centres as focal points for business and community investment.”
Royal Oak is an affluent suburb, with QV figures this year showing the median house price to be $1,006,100, Kermode says.
“The large and established surrounding residential catchment is well-positioned to service local businesses such as restaurants and eateries.
“To the south of Royal Oak is the growth suburb of Mangere Bridge, which has experienced significant increase in values lately, to the north is the affluent suburb of Epsom, and to the northeast is One Tree Hill.”
Kermode says Mount Albert Rd is a main arterial route, making it a highly desirable location for businesses seeking great exposure and ease of transport.
“The property is also only metres away from the Royal Oak Roundabout, which provides access to Auckland’s CBD by way of Manukau Rd, connection to the northern and southern motorways via Campbell Road and quick access to Onehunga through Mount Smart Rd.
“The Western Ring Route motorway connection, due for completion in 2017, will dramatically improve access to this area by linking State Highway 20 with State Highway 16 via a six-lane motorway, opening up easier links to west and north Auckland.”