Dual anchor tenancies provide stable platform for commercial property investment opportunity
The land and buildings housing a Government welfare agency and a regional health board are part of a provincial commercial property complex which has been placed on the market for sale.
The property at 6 Te Aroha Road in the Waikato township of Paeroa is home to the Ministry of Social Development and the Waikato District Health Board, with some 40 percent of the remaining premises within the complex currently vacant.
The 2836 square metre block sits on 5,778 square metres of industrial-zoned land on the periphery of Paeroa’s central business district. The freehold land and two-storey buildings are being marketed for sale by tender through Bayleys Waikato, with tenders closing on July 6.
Waikato commercial salesperson Josh Smith said the obvious
investment potential for the site was to lease the vacant
space. The tenancy schedule in its present format
• The Ministry of Social Development currently on a three year lease running through until 2020, with two further three-year rights of renewal generating annual rental of $140,570 (as of June 1). The Paeroa branch is one of 200 Ministry of Social Development sites around New Zealand and services the nearby Hauraki Plains townships of Kerepehi, Ngatea, Hikuata and Te Aroha.
• The Waikato District health Board on a five year lease running through until 2016, generating annual rental of $30,490.
Mr Smith said the dual tenancies shared access to the various staff amenities such as toilets, the kitchen, and lunchroom. The Paeroa complex was built in the late 1980s with fibrolite cladding over wooden framework, and has been well maintained throughout its life. Offices inside are temperature controlled through multiple air conditioning units.
“The ground floor offers a further
709 square metres of vacant space set up as a large,
open-plan floor space which could either be continued in its current format, or subdivided into multiple smaller tenancies,” Mr Smith said.
“This existing vacant space has its own staff amenities and independent access, and is eminently suitable for relocation by an owner/occupier seeking new premises.
“Meanwhile, the vacant first floor space of some 406 square metres is split into multiple offices served by a large reception area. Again, this space has its own bathroom and kitchen amenities, and is accessed independently of the other tenants on site.
“There is an ample number of existing car parking spaces to accommodate any new additional tenancies on the site. The property has car parking for more than 50 vehicles, with additional street parking immediately in front and to the side of the entrances on both Rotokahu and Te Aroha Roads.”
Mr Smith said that with Paeroa being virtually equal distance between Hamilton and Tauranga, the vacant commercial space could cost-effectively house a business with activities or clients in both those cities. Travelling time to either city is less than an hour.
“Alternatively, with Waikato District Health Board already occupying part of the adjacent premises, the upper level could be remodeled into a one-stop medical services hub with various health practices operating complimentary to each other.”
The land and buildings contained within the property have a Hauraki District Council 2016/17 rating valuation of $1.93 million.
Mr Smith said a visionary entrepreneurial landlord could look at utilising the Ministry of Social Development as an anchor tenant and building a social services network hub of other community groups and agencies in the adjacent vacant office space.
“The ministry has a broad community mandate – ranging from the administration and provision of work and income programmes, and the distribution of student loans and allowances, through to the delivery of youth services programmes and advisory programmes for the elderly,” he said.
“Businesses or organisations with activities in these areas could be brought together to become a one-stop social services hub with a shared focus. It would make an ideal location for an iwi entity to set up its community activities.”