Medical centre sell-off proves a shot in the arm for commercial property investors
The land and buildings housing one of the biggest provincial private medical centres in the Bay of Plenty has been placed on the market for sale.
The 1,529 square metre medical complex at 4 Clive Road in Katikati houses five healthcare professional operations, including the Katikati Medical Centre, JS & JA Allan Pharmacy, Bay Radiology, Pathlab Bay of Plenty, and Osborne Physio.
Katikati Medical Centre’s core clinical services employ some 32 staff – including eight general practitioners, nine nurses, and administrative support personnel.
The full tenancy schedule of the Katikati property - which returns a net annual rental of $276,567 plus GST- features:
• Katikati Medical Centre, which has two separate leases in place – one for its administrative offices, and 16 of its 18 practice rooms. This lease is currently running through to 2018 with three further three-year rights of renewal, while the two remaining medical rooms are on a two-year lease also through to the end of 2018 with two further two-year rights of renewal.
• Bay Radiology which is currently on a three-year lease through to 2018 with three further three-year rights of renewal.
• JS & JA Allan Pharmacy which is currently on a three-year lease running through until 2018 with three further three-year rights of renewal.
• Pathlab Bay of Plenty which is currently on a three-year lease through to the end of 2018 with three further three-years rights of renewal.
• Osborne Physio which is currently on a three-year lease through to 2020 with two further three-year rights of renewal.
Two of the tenants sub-let space – one to a dental service and the other to a hearing clinic – making the Clive Road property one of the biggest full-service private medical centres in the region.
The individual tenancies share common areas within the building - ranging from the main entrance and foyer with adjoining staff and patient toilets, through to a staff lunchroom.
The predominantly single-storey property is being marketed for sale by tender by Bayleys Tauranga, with tenders closing at 4pm on August 2. Bayleys Tauranga salesperson Brendon Bradley said there was an immediate opportunity to lift revenues from the property by leasing a currently vacant suite containing two consultation rooms.
“The complimentary nature and focus of all business within the centre enable users to access a one-stop facility. This is a considerable benefit for both the business tenants and their customers who record high levels of user-satisfaction,” Mr Bradley said.
The building was original constructed in 1979 of brick veneer and timber framing on concrete slab floor and has been added to several times over the intervening decades. The complex meets 100 percent of new build standards and sits on 4,305 square metres of freehold land in a rectangular shape.
Mr Bradley said the property contained uncovered car parking for 57 vehicles, with additional covered and secured car parking for five vehicles, and a space specially reserved for ambulance access. Convenient vehicular access to the corner-site property was off either Clive Road or Beach Road.
Katikati’s population has been recording steady growth over the past five years – rising by 2.59 percent year-on-year between 2013 – 2015 according to latest Census data. It is currently estimated to be 4,642 people.
To sustain the town’s rising population, Western Bay of Plenty District Council last year began a feasibility study to look at the options for expanding Katikati’s residential zoning around the west of the central business district.
The council said: “The work is a response to continuing pressure to ensure enough land is available to house the future population growth expected in the sub-region. Identifying land for future urban development is part of the sub-regional growth strategy.
“The feasibility study will establish which land is suitable for housing, estimate the number of houses that could be built, and the level and cost of providing the infrastructure required such as water supply, wastewater, storm water and roading. It will also determine whether the land is economical to develop. The feasibility study may also result in changes to the area’s boundary.
“If this investigation determines the area is feasible to develop, Council will progress a structure plan which will show how the growth area is planned to be laid out and what infrastructure goes where. The Resource Management Act procedures for changing the District Plan will then take place to give effect to the Urban Growth Area. “
The investigation panel was due to report back on its findings in February, but has subsequently announced that additional analysis is required to present a more comprehensive narrative – which is now scheduled for release next month.
Mr Bradley said the town’s continuing population growth would automatically funnel into the services provided by the Katikati Medical Centre – thereby giving a degree of operational confidence and certainty to businesses within the well-established complex
“There is some 400 square metres of currently grassed area within the Clive Road premises which could not only allow for further development of the medical premises to potentially cater for more patients, but also for the creation of additional off-street car parking for both staff and patients,” he said.