Split-risk retail investment in exclusive Herne Bay

Two-level character building provides a rare opportunity to own a fully leased investment on Herne Bay’s busiest block

A fully leased character investment for sale on the main shopping strip of Auckland’s exclusive Herne Bay presents an opportunity to secure a freehold asset in New Zealand’s most affluent suburb.

Colliers International Investment Sales brokers Kris Ongley and Ned Gow are marketing the 271sq m freehold property at 212 Jervois Road for sale by auction.

It will go under the hammer at 11am on Wednesday 28 November, unless it sells earlier.

Ongley says it is an exceptional opportunity to acquire a split-risk investment property within Herne Bay’s most popular retail block.

“With its prime position on Jervois Road, this is a truly rare offering within a highly sought-after, low-vacancy area.

“The property comprises a two-level character building, constructed in the 1910s, with a single-level retail extension later added.

“It is fully leased to a popular local cafe and hairdresser, providing a combined annual rental income of $79,559.16 net plus GST.

“The rectangular freehold site is zoned Business Local Centre, which allow for development of up to 13m in height. Permitted activities include residential, retail, office and food and beverage.

“About half the site to the rear is mostly undeveloped, providing long-term redevelopment opportunities for the astute investor.”

Gow says the property sits on top of the Herne Bay ridge.

“Its north-facing frontage to Jervois Road enjoys all day sun, while the rear of the site benefits from shared access via Wanganui Avenue.

“The land at the rear is currently underutilised as a garden and car parking, but could be redeveloped with appropriate resource consents.

“This could allow a developer to plan a higher-density use for the 271sq m site while maintaining the character of the original building.”

The property has a net lettable area of approximately 221sq m, split between two ground floor retail tenancies and a first-floor office or residential space. Both retail tenancies share a canopy to the Jervois Road frontage.

The original two-storey building at 212 Jervois Road is of brick masonry construction with wooden features and floors.

The ground floor comprises a cafe and commercial kitchen, while the first floor is used as the cafe’s office and storage area.

The 173.95sq m building is fully tenanted by Bacio Cafe and Catering – a new but already highly regarded addition to Herne Bay’s popular hospitality scene.

Bacio is signed to a four-year lease returning $57,253 plus GST in net annual rent, with one further right of renewal of four years. The next inflation-indexed rental review is due in January 2020.

The retail addition at 212A Jervois Road sits between the original building and an adjoining brick retail building. The 47.05sq m tenancy includes a deck and rear storage area.

Inpsirations Hairdresser is signed to a five-year lease returning $22,305.96 in net annual rent, with a single right of renewal for a further five years. The next market rental review is due in July 2020.

Gow says the area’s main attraction is its location, less than 10 minutes’ drive from the Auckland CBD and close to popular Grey Lynn and Ponsonby.

“Herne Bay is predominantly made up of single-house dwellings but is seeing an influx of apartment projects as demand for city fringe property increases.

“Jervois Road, the main strip of Herne Bay, hosts a variety of well-known retail outlets, many of which are popular food and beverage offerings.

“Auckland-wide demand for Herne Bay’s high-quality retail means Jervois Road enjoys excellent pedestrian traffic from breakfast to dinner.

“With its strong trading environment, well-heeled retail catchment and obvious future potential, the property up for auction would make a welcome addition to any investor’s portfolio.”

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