Mount Central a 'gilt-edge retail investment'
Mount Central is on the market for the first time since the premium retail centre in the heart of Mount Maunganui was developed in 2016.
Colliers International Tauranga Director Simon Clark describes it as a “once in a lifetime” opportunity to invest in one of New Zealand’s top tourism and beachside locations.
“This distinctive, architecturally designed retail and hospitality complex is situated on a prime corner site in the sought-after downtown Mount Maunganui retail area.
“The 1,345sq m building offers nine single-level retail tenancies, each with wide retail frontages and access to a rear service lane, as well as 52 on-site car parks.
“The property has a great mix of retail, restaurant, cafe and convenience food tenants that are all on long-term leases, with guaranteed annual rental increases.
“The 3,096sq m freehold site has abundant future potential for further development.
“Commercial zoning allows for development of up to 12m in height, while the building’s design allows for subdivision into four separate freehold titles.”
The property at 223 Maunganui Road, at the corner of Banks Ave, is for sale by deadline private treaty.
Offers close at 4pm on Thursday 15 November, unless the property is sold earlier.
Duncan Woodhouse of Colliers International Tauranga says it returns an estimated annual rental income of $788,000 per annum plus GST and outgoings.
The leases all contain locked-in rental growth of CPI plus 2 per cent per annum. There are also market reviews over the next 18 months, providing scope for significant rental increases.
Woodhouse says Mount Central has very desirable tenancy sizes of between 80sq m to 120sq m, with more than 90m of combined retail frontage.
“Designed by First Principles Architects, the development uses a range of quality modern materials that reflect and complement The Mount’s unique beachfront setting.
“A roofed atrium on the prominent corner of the site provides sheltered outdoor seating for al fresco dining in front of the outdoor gas fire.”
Mount Central is anchored on the corner by the Rabbit Hole cafe and restaurant and bar Bamboo.
The remaining tenants include local and national businesses Pita Pit, Sal’s Pizza, Palace Burger, Mount Boutique Liquor, Sunny’s variety store, Epsilon hair salon, and fashion boutique MKT.
Woodhouse says Mount Central services a huge number of local, national and international tourists who are drawn to this boutique beachside shopping location throughout the year.
“Mount Central is superbly positioned at the gateway to The Mount’s main retail area, less than 250m from the Port of Tauranga’s international passenger terminal.
“With 110 cruise ships scheduled to berth this summer, an estimated 225,000 international tourists are expected to stream out of the gates towards The Mount and surrounding areas.
“Mount Central is within easy walking distance, giving its retailers huge exposure to foot traffic from cruise ship passengers.
“It is also five minutes’ walk to the harbour to the west and the ocean to the east, and 10 minutes’ walk to the base of Mount Maunganui itself.
“During the summer months, the population of The Mount swells by hundreds of thousands and retailers cash in on these huge numbers of customers staying and visiting the area.”
Clark says The Mount’s main street currently has no retail vacancy, making retail investments in the area highly desirable.
“Retail tenancies are always in high demand from local and national tenants, driving rents to record high levels each year.
“Modern developments are particularly attractive to higher-quality tenants, who are willing to pay much higher rents.”
Clark says older retail units on The Mount’s main strip attract rents of between $400 to $500/sq m, while modern developments are setting new benchmarks of between $700 to $850/sq m.
“Mount Central’s smaller tenancies are currently returning $600 to $650/sq m, which suggests there is significant opportunity for rental uplift at upcoming market reviews.
Mount Central’s car park area, managed by Wilson Parking, will generate an estimated $15,000 rental this year. This lease expires in June 2019.
“There is a significant opportunity to further enhance the income from this area as car parks are in short supply.”
Clark says it is a superb opportunity to acquire a long-term investment with solid fundamentals.
“This gilt-edged retail investment is well positioned to last the test of time and bear fruit for generations to come.”
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