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Gym’ tenancy offers opportunities for commercial property

Two newly-built commercial premises in the high-profile purpose-built Grange retail hub just north of Auckland have been placed on the market for sale.

Two newly-built commercial premises in a high-profile purpose-built retail hub – one housing a gymnasium and the other accommodating an engineering firm – have been placed on the market for sale.

The outlets are in The Grange retail convenience centre located on one of busiest stretches of State Highway One on the southern outskirts of Warkworth just north of Auckland.

The Grange comprises 31 units in total with a mix of national and local businesses, and is anchored by McDonald’s and the BP Station, joined by Domino’s Pizza, Coffee Club, Tank Juice, Educare Childcare, and St Pierre’s Sushi. The site is located at 67 Auckland Road.

Tenanted properties have already been sold in four staggered phases over the past two years. There has also been an exceptionally strong clearance rate on a range of tenanted units offered for sale to investors on an individual titled basis in a number of stages.

Leases have ranged from five to 10 years and annual net rentals from $30,000 to $92,500. Yields on these sales have ranged from 5.2 percent to 6.5 percent at prices between $475,000 and $3.35 million.

The latest two freehold units at The Grange to come onto the market are being individually marketed for sale at auction on June 28 by Bayleys Auckland and Bayleys Warkworth. The sales process is being jointly run by James Chan, Matt Lee and Jan Hutcheson.

Unit 15 within The Grange consists of 367.5 square metres with Fit Factory Gym as the tenant. The gym – which operates on a 24/7 basis - is on a newly-signed six year lease running through until 2023 generating a net rental of $91,925 plus G.S.T. and annual rent reviews tied to the Consumer Price Index plus one percent.

The gym operates the full range of cardio and strength conditioning equipment and machinery. The premises is fitted out with separate toilet and show facilities for members.

Meanwhile, Unit 21A within The Grange consists of 60.9 square metres with Hawthorn Geddes Engineers & Architects Ltd as the tenant. The firm is on a newly-signed six year lease running through until 2023 generating a net rental of $21,315 plus G.S.T. and annual rent reviews tied to the Consumer Price Index.

Established in 1962, Hawthorn Geddes Engineers & Architects Ltd is the largest locally-owned multi-discipline practices of its type in Northland – contracted to projects throughout the province and with its head office in Whangarei.

The firm provides architecture and project management services, civil engineering skills, structural engineering capabilities, and geotechnical and environmental expertise.

James Chan said investors have been attracted by The Grange’s very prominent location, with its SH1 positioning providing high profile exposure to approximately 6.35 million cars a year which pass its entranceway.

“Other draw cards for investors are the brand new nature of the premises and their long leases, most of which also have built in annual rental growth - putting them within smaller investors’ budgets,” says Mr Chan.

“The Grange is the only retail hub of this scale along State Highway One travelling south between Wellsford and Auckland,” Mr Chan said.

“ The centre is well-positioned at the entrance to Warkworth with ease of access from both sides of the road, and is surrounded by residential developments of approximately 200 houses under construction or scheduled for construction.

“As a major growth location, Warkworth is projected to increase to a population of 20,000 over the next 30 years.”

The area immediately adjacent to the Grange hosts a range of established businesses - including Mitre 10 Mega, Carter's, Repco and VTNZ.

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