High-profile freehold corner property for sale with split-risk income
BP Ormond Road’s high-profile corner property in Gisborne is for sale, offering potential buyers a chance to acquire a split-risk investment with strong tenant covenant and a brand-new, 12-year lease.
Colliers International has been exclusively appointed to market the 2,294sq m freehold property at 192 Ormond Road in Mangapapa, Gisborne, for sale by deadline private treaty.
Offers close at 4pm on Wednesday 29 August, unless sold prior.
Prominently located on a large corner site with excellent frontage, the property is well positioned to serve the popular residential area of Mangapapa and Gisborne’s wider northern suburbs.
Jason Seymour of Colliers International’s Capital Markets team is marketing the property for sale with Philip Searle, Brian Shields and Hayden Houthuijzen of Colliers’ Gisborne office.
Seymour says it is an exceptional opportunity to acquire a low-risk, long-term investment property with both structured and market rental growth.
“BP Ormond Road is a modern suburban service station with a recently refurbished retail shop, expansive canopy, six petrol pump lanes, and a standalone high-flow diesel pump.
“Located on Ormond Road, one of Gisborne’s main arterial routes, the property is only 2.5km from Gisborne’s CBD and superbly positioned as the only petrol station north of the Taruheru River.
“BP Ormond Road is signed to a brand-new, 12-year lease to an experienced national operator with established supply agreements.
“A workshop and LPG bottle filling facility on the property are occupied by a separate tenant on a six-year lease.
“Both leases return a net annual passing income of $117,800, with highly attractive structured rental growth.
“With a prime location, strong tenant covenant and favourable leases, this is a superb chance to acquire a solid passive investment with long-term potential.”
The property is on two freehold titles with extensive frontage to Ormond Road. The site is generally flat and offers dual vehicle access to Sheridan Street.
Ormond Road is a short drive from State Highway 35 via the Esplanade, providing good access to the centre city, the East Cape via SH35, and the wider Gisborne and Hawke’s Bay regions via SH2.
Searle says the property benefits from modern, high-quality improvements.
“The site was originally developed in 1936 and has since been extended and extensively refurbished. The workshop was constructed in 1975 and an extension was completed in 2005.
“Major renovations in 2007 included a brand-new canopy, while a new office and modern new retail fit out were completed in 2016.
“The retail area includes a shop with a main counter, food and coffee kiosk, product displays, and all necessary modern amenities.”
The service station is leased to Number 8 BP Limited, a wholly owned subsidiary of Number 8 Retail Group.
Established in 2008, the company’s portfolio of convenience retail brands includes Caltex, BP, FIX, Subway, Jesters and BurgerFuel.
The group operates from 37 retail sites and employs more than 400 people. It generated over $250 million in revenue in the last year.
Number 8 BP Limited is signed to a 12-year lease returning $86,000 in net annual income, with structured rental growth of 4 per cent every two years.
The lease has six rights of renewal of six years each, with market rental reviews every 10 years. The final lease expiry date is in May 2066.
The workshop and LPG filling facility are on a six-year lease to L&F Sutherland, commencing in April 2017.
The lease returns $31,800 in net annual rent, with rental reviews to CPI every two years, and market rental reviews on renewal.
Two rights of renewal of six years each extend the total lease term to March 2035.
The property is zoned General Residential. The service station and workshop are non-complying activities, but enjoy existing use rights.
Gisborne is New Zealand’s easternmost city, with 43,000 inhabitants. It is the main centre of the East Cape, located three hours’ drive from Tauranga and two-and-a-half hours’ drive from Napier.
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