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Hairdressing salon proves to be a cut above
Hairdressing salon proves to be a cut above the rest for rental yield
A commercial premises in the heart of Gisborne’s CBD and generating one of the highest rental returns in the city has been placed on the market for sale.
Prominently situated situated in the heart of the central city the property has a long-established tenant, producing a rental return of 16 percent.
Located at 20 Lowe Street in the block bounded by Gladstone Road to the southwest, and Reads Quay and the Taruheru River to the northwest, the premises is part of a two-level commercial building known as the Redoubt Building. It is one of five strata title units.
The premises has been placed on the market for sale with Bayleys for $195,000 plus GST. Bayleys salespeople Karen Raureti and Colin McNab are marketing the property.
Hairdressing business Hairlucination has been a tenant in the building for five years. The salon provides full hairdressing services from trims and a range of haircuts and styles to colouring, straightening and braiding. The business is open five days a week from Tuesday to Saturday with late nights on Wednesdays.
Constructed in 1981, the 107sqm unit features concrete walls and floors, aluminium windows and a galvinised iron roof.
The property is returning a net rental of $31,200 plus GST. The lease commenced on 1 August 2015, with two three-year rights of renewal. The owner pays the rates and bodycorp fees.
The prominent position of the building coupled with its rental return made it the complete package for an owner or investor, said Mrs Raureti.
“The property is situated in close proximity to the waterfront and within the central township, which is well frequented by locals and visitors. Gisborne’s CBD receives a high volume of foot traffic, particularly during the summer months when the region swells with holidaymakers,” she said.
“A yield of 16 percent well exceeds the average return for commercial investments in this region, and indeed around much of the country. This is a solid investment opportunity.”
Recent figures from Interest.co.nz showed residential rental yields have continued to decline in Auckland, Hamilton, Wellington, Nelson, Christchurch and Queenstown. These have dropped to drop below five percent in most parts of Auckland and under six percent across much of the rest of the country.
In the commercial investment market numbers to March 2015 showed annual total returns for all property office, industrial and retail were 11.7 percent, according to business publication National Business Review.
“The prospect now exists for a new owner to take over this prominent location tenanted by a built-for-purpose business with an already established clientele.”
The property is zoned ‘inner commercial’ within an area covered by a continuous street façade which aims to protect the existing architecture and is subject to criteria regarding any alterations or rebuilding.
An extensive list of chattels are part of the sale including the complete salon fit-out which features lights, mirrors and benches, basins, salon chairs, display cabinets, washing machine and drier, chairs and tables, computer and software, hairdryers, heaters, microwave, fridge and stereo.
A $120 million transport package for Gisborne, announced by the New Zealand Transport Agency in June this year, is expected to boost the region’s economy.
The work will include creating an additional 20km of roads, improvement to bridges and extensive maintenance of the district’s roads over the next three years. The investment aims to help keep people and freight moving and to fulfil the economic potential of the region.
“This initiative will further drive economic growth to this region, benefitting the already-significant tourism market and local businesses, said Mrs Raureti.
“All of the hard work has already been done. This is a property in a highly-desirable area with an exceptional return for a new owner and represents a one-of-a-kind opportunity.”
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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