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Prime corner site location has room for tenancy growth
Prime corner site location has room for tenancy growth
The ground floor space in one of the most modern and high-profile commercial buildings in the central business district of Northland township Kerikeri has been placed on the market for sale.
Constructed in mid-2000s, the 250 square metre corner street-level unit of three separate tenancies sits within the three-storey John Butler Centre at 60 Kerikeri Road. The John Butler Centre – named after the missionary settler of the early 1800s - houses a broad mix of commercial and retail tenancies.
Some 71
percent of the corner site being offered for sale is leased,
while 74 square metres are vacant. Anchor tenants within the
three tenancy unit include:
• House of Travel, which
has a three year lease expiring in 2018, with two further
three year rights of renewal
and
• Clothing outlet
La Madu which has a lease expiring in the second quarter of
2016.
Combined, the two tenancies produce $44,586 of revenue per annum. Other neighbouring tenants within the John Butler Centre include the Far North District Council, Top Energy, Bay Audiology, S’wich Café, and Lowes & Partners Optometrists.
The three-unit ground floor portion of the John Butler Centre is being marketed for sale by Bayleys Real Estate at auction on December 2, through Bayleys North Shore salespeople Michael Nees and Brian Caldwell and Bayleys Kerikeri salesperson Alan Broadbent.
Mr Nees said the John Butler Centre was generally regarded as the best commercial block in Kerikeri – not only from a design and construction perspective, but also because of its high street location. Body corporate fees for building maintenance are paid by individual tenants.
“Combined, these facets have attracted strong tenants wanting to be part of the town’s best high street real estate. The John Butler Centre is easily the most prominent commercial building in Kerikeri’s main street,” Mr Nees said.
The unit being sold has shared access to nine designated car parks – most of which are used for staff as Kerikeri’s main street has a plethora of unmetered parking bays. With a population of 6507 people according to the last census, Kerikeri is Northland’s largest service town.
The House of Travel brand has been present in Kerikeri township for 25 years. All three tenancies have their own separate entrances off the wide boulevard-style pavement outside, as well as individual staff amenities such as kitchens and bathrooms. The vacant site faces directly opposite Kerikeri’s Countdown supermarket.
Mr Nees said the potential rental upside for La Madu, combined with the projected rental from the available tenancy, would bring the forecast annual rental up to approximately $70,000 for the property.
“On that basis, we are expecting a projected rental yield from the three tenancies of between 10-11 percent. That compares favourably with Auckland - where yields of similar suburban offerings are producing yields of between 6-7 percent,” he said.
The Government’s Northland Regional Growth Study
released at the beginning of this year by Economic
Development Minister Steven Joyce highlighted that the
region and its support towns, including Kerikeri, had
significant untapped economic potential.
The study found
Northland's economy was underperforming - having 3.6 per
cent of the population, but contributing 2.9 per cent of
employment and 2.6 per cent of gross domestic product
(GDP).
The Northland-specific study spotlighted that the
region's natural assets, rich cultural heritage, and
youthful population presented distinctive and significant
opportunities for growth in the tourism, forestry, dairy,
aquaculture and horticulture sectors.
Mr Caldwell said
from that perspective, the John Butler Centre commercial
block being sold mirrored the region’s overall economic
picture.
“With the existing tenancy, there is considerable upside for the site from a rental generation perspective. The building is zoned commercial - which allows for either retail premises, including food and beverage, or a small business occupancy,” he said.
“The fundamentals are in place for a solid investment opportunity, or for a potential owner/occupier looking to take up the available unit for operating out of for up to say six or seven staff.
“Under that dynamic, the site would lend itself to a small locally-based professional services business - such a chartered accountancy practice, legal firm, an architect’s studio, or a media and marketing design agency – seeking to be in the heart of town in a modern and functional premises.”
ENDS
Bayleys Real Estate
New Zealand
Bayleys is New Zealand's largest full-service real estate company. We offer expertise in the marketing and sale of a wide range of property, including residential real estate, farms and lifestyle blocks, and commercial and industrial property. This includes tourism and business sales such as hotels and motels. We also cover the real estate markets in Fiji and other Pacific Islands.
Bayleys also provides a complete property and facilities service including property management and valuations teams focused on achieving both Owner and Tenant satisfaction.
No other real estate company can match our breadth of coverage across all market sectors throughout New Zealand.
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