Premium four-storey office and hospitality development for sale
The auction of a premium new four-storey office and hospitality development in Tauranga’s vibrant dining precinct presents a chance to secure the “ultimate waterfront trophy investment”.
Completed in September 2018, the high-specification new build at 49-51 The Strand offers stunning views of the harbour and the council’s new waterfront precinct.
It is fully leased to four established tenants, providing a split-risk income with long-term leases, built-in rental growth and personal lease guarantees.
The premium nature of the investment is exemplified by the considerable level of tenant investment in high-quality internal fit outs, complementing the exceptional waterfront location.
Simon Clark, Managing Director of Colliers International Tauranga, describes the property as the must-have mixed-use investment of 2019.
The agency has been exclusively appointed to market the property for sale by auction at 11am on Thursday 21 February, unless it sells earlier.
“This property’s unbeatable location, superb build quality and strong tenant covenant make it the ultimate waterfront trophy investment,” Clark says.
“The ground floor is occupied by an experienced restaurant and bar operator, while the upper levels are leased by three quality office tenants.
“Investments in this prime CBD waterfront location rarely come available, especially with such a secure rental income and a brand new, high-specification building.”
Duncan Woodhouse of Colliers Tauranga says the property was developed by Strand Commercial Properties and built by local construction experts iLine Construction.
It comprises a 985sq m office and retail complex on a 294sq m freehold site with Commercial zoning.
“Premium elements include floor to ceiling glass facades, a butterfly roof with 4m-high windows, a glass curtain wall to the lift lobbies, and redwood soffits and louvres,” Woodhouse says.
“The development also makes the most of its expansive views with 114sq m of large, sheltered decks over three levels.”
The property returns a combined net rental income of $362,770 plus GST and outgoings, with lease terms of between six and 10 years.
The ground floor hospitality space is leased by Hereford and Farm Produce Limited, which also runs the popular Alimento Cafe on First Avenue and the Elizabeth Street Cafe.
The 238sq m tenancy is split into two distinct offerings – Otto Eatery, and Oscar Restaurant and Wine Bar – which share a kitchen and facilities.
Otto is among the only cafe establishments offering coffee during the day to service the large number of office staff in the area.
The company is signed to a 10-year lease returning $110,670, with six rights of renewal of six years each.
Rental reviews are yearly to CPI, capped at 3 per cent, and every five years to market, capped at 10 per cent.
The upper office levels are each 241sq m with 38sq m balconies. They are tenanted by real estate agency Sotheby’s, property valuation firm Telfer Young, and insurance brokerage Financial Independence.
Sotheby’s Tauranga, which is operated by Colliers Hawke’s Bay and Rural franchisee Tremain Group, occupies the first floor on a six-year lease, with a single five-year right of renewal.
The lease returns $86,300, with market rent reviews every three years.
Telfer Young, which occupies the second floor, is signed to an eight-year lease returning $76,800, with five rights of renewals of five years each.
Rental reviews are yearly to CPI, capped at 3 per cent, and every four years to market and on renewal.
Top-floor tenant Financial Independence is signed to a six-year lease returning $89,000, with six rights of renewal of six years each.
Rental reviews are yearly to CPI, capped at 3 per cent, with market reviews on renewal.
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