Sell-down begins for Suburban Retail Hub

Monday, 23 March 2015, 4:38 pm
Press Release: Bayleys

Sell-down begins for latest generation of suburban retail hub development

The property developer behind Rotorua’s most successful suburban retail and commercial hub is now selling off a near-identical precinct on the other side of town.

Visionary construction company chief Tony Bradley built the Redwood Centre some three kilometres east of Rotorua’s central business district in 2013. Over the subsequent two years, Mr Bradley gradually sold off the 14 retail tenancies within the hub – encompassing convenience food outlets, a health and fitness centre, liquor shop, hair salon/beauty parlour, and grocery store.

While the Redwood Centre was being sold off, Bradley’s TPB Properties was building a mirror-image suburban retail hub at Fairy Springs on the other side of city. The complex – on a high profile 6300 square metre site of what was previously Orderings Nursery – was completed in March last year.

Now five of Fairy Springs’ 10 individual tenancies are being sold off too. The portfolio of properties is being marketed by Bayleys Rotorua to be sold individually at auction on April 16.

Bayleys Rotorua leasing specialist Mark Rendell, who has previously sold off all of the Redwood sites, said the five Fairy Springs units up for sale ranged in size from 87 square metres to 279 square metres, and all had freshly-negotiated leases.

The five tenancies up for sale are:

• Skyline Superette. In a 279 square metre site with a six year lease returning $50,000 per annum and with one further six year right-of-renewal and and three further three year rights-of-renewal.
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• BurgerFuel. In a 120 square metre site with a 10 year lease returning $39,000 per annum and with one further six year right-of-renewal and an additional four year right of renewal.
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• Te Arawa Fresh Seafood. In a 123 square metre site with a six year lease returning $35,670 per annum and with two further three year rights-of-renewal.
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• Springs Bakery. In a 130 square metre site with a six year lease returning $33,800 per annum and with four further four year rights-of-renewal.
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• Best Sushi. In an 87 square metre site with a six year lease returning $26,100 per annum and with two further three year rights-of-renewal.
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The Fairy Springs retail hub overlooks State Highway 5 on the main route in and out of Rotorua from Auckland and Tauranga – with a daily average traffic count of 25,000 vehicles underpinning a substantial passing trade.

Like the Redwood Centre, Fairy Springs borders a major residential section of the city - with both schooling and the Skyline recreational amenities close by. The short-stay shopping complex has 90 common-share car parks.

Mr Rendell expected the Fairy Springs sites to follow in the footsteps of the highly successful Redwood sell-down. All of the new properties going up for auction have either a three percent annual rent increase built-in, or are linked to CPI increases - giving new owners guaranteed rental growth.

“The location, tilt-slab single storey build-style, and tenancy mix for Fairy Springs is based on a proven formula. BurgerFuel, Te Arawa Fresh Seafood and Best Sushi also have outlets at the Redwood Centre, and saw value in extending their Rotorua presence to this side of town where they wouldn’t be in competition with the existing outlets,” said Mr Rendell.

“With a high passing traffic count - sustained by a well-established surrounding resident population - we are expecting strong buyer interest from investors in Rotorua and the wider Bay of Plenty. Again, this ownership demographic will replicate what has been achieved through Redwood.”

“The appeal comes from having new built premises, constructed to 100 percent of New Building Standards, with a diverse range of established tenancies on long leases. It’s close to the perfect buyer check-list.”

The tenancy mix within the Fairy Springs hub is anchored by the Fairy Springs Medical Centre and Pharmacy, which Mr Rendell said was another magnet for pulling in adjunct customers throughout the day. The medical centre however was not part of the sell-down, and is being retained by TPB Properties.

ENDS

© Scoop Media

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