Investors catch a break as landmark beach resort commercial block goes up for sale
A landmark commercial block housing diverse local amenities and apartments in the Coromandel beach Mecca of Whangamata has been placed on the market for sale.
Famed for its sweeping white-sand beach – voted the country’s best in a survey in 2018 - Whangamata’s population swells by tens of thousands each summer as visitors descend to swim, surf or attend the largest classic car celebration of its kind in New Zealand – the annual Beach Hop.
The two-storey property on a high-profile corner site at 800 Port Road is home to seven commercial tenancies on the ground floor – ranging from a popular Indian restaurant and a takeaway outlet, to the local Coastal News newspaper, homebuilder A1 Homes, a beauty salon, and a barber.
The commercial leases generate a combined net annual rental income of approximately $125,000 plus outgoings and GST. This is supplemented by six residential apartments on the first floor which return a further $106,000 per annum.
Lease terms for the commercial tenants include:
• Kafal Indian restaurant – the
largest tenant – occupying some 145 square metres, paying
annual rent of $38,500 plus outgoings and GST. Its current
lease runs through to 2022, with four further three-year
rights of renewal.
• Roundabout Takeaways leasing 108 square metres – generating rental income of $18,200 plus outgoings and GST per annum, on a lease which runs to 2022, with four further three-year rights of renewal.
• A1 Homes occupying 110 square metres on a lease running to 2023, with one further three-year right of renewal, paying annual rent of $18,000 plus outgoings and GST.
• Whangamata Barbers occupying 110 square metres – generating annual rental income of $18,000 plus outgoings and GST, on a lease which runs to 2021 with two further three-year rights of renewal.
• Coastal News leasing 90 square metres for $17,969 plus outgoings and GST per annum on a lease running through to 31 October 2020.
• Enhance Me beauty salon paying annual rent of $14,000 plus outgoings and GST for its 68 square metres – with a new draft lease running through to 2022, with one further two-year right of renewal.
• A seventh, vacant, tenancy – previously a pizzeria – which previously generated $5,830 plus GST per annum.
The property is now being marketed for sale jointly by Bayleys Hamilton and Bayleys Coromandel. Salespeople Josh Smith and Belinda Sammons said the property consisted of a building of approximately 1,100 square metres on some 1,011 square metres of freehold land.
“Its ground-floor commercial space offers prominent street frontages for the building’s commercial tenants, with adjacent on-street parking along Port Road,” said Mr Smith.
“Six two- and three-bedroom apartments on the first floor are supported with off-street parking to the rear of the building.”
The property is located at the roundabout where Port Road intersects with Hetherington and Hunt roads.
“This is Whangamata’s most prominent roundabout – which is familiar to locals and visitors as a key location for the Repco Beach Hop parade. Of all the prominent landmarks in Whangamata, 800 Port Road may be the most recognisable,” Mr Smith said.
“With its significant frontage along Port Road towards the Whangamata Ocean Sports Club and wharf, this is usually one of the first commercial buildings you see as you enter the town.”
The building’s commanding location, combined with the town’s summer population influx – swelling to more than 60,000 people over New Year and 125,000 during the Beach Hop – ensured high demand for tenants’ businesses and for the apartments, Mr Smith said.
“Whangamata’s reputation as one of New Zealand’s premier beach towns keeps people coming – including the owners of the town’s numerous holiday homes. The town’s location, fringing the ‘Golden Triangle’ of Auckland, Hamilton and Tauranga, gives it ready access to the country’s largest population catchment.
“This strong orientation towards domestic visitors will stand Whangamata in good stead as more Kiwis prepare to holiday at home amid Covid-19 related restrictions on international travel.”
Constructed in the 1960s, the Port Road property has an Initial Evaluation Procedure rating of 68 percent of new building standards. It is zoned Industrial (8A) under Thames Coromandel District Council’s district plan.
Ms Sammons said Whangamata’s central business district sustained one of the best shopping centres on the Coromandel Peninsula – with complementary amenities near to 800 Port Road including banks, a supermarket, cafes, and sporting, homeware, clothing and pharmacy outlets.
“The diverse, multiple commercial and residential tenancies within the block deliver a split-risk investment opportunity,” Ms Sammons said.