Whangarei's largest CBD retail property, the 5151sq m Farmers department store building, is for sale offering a high yield and a future redevelopment opportunity.
The two-level standalone building, on a 2787sq m site at 8 Robert St, has been occupied by Farmers Trading Company Ltd since its completion in the mid-1990s and the retailer's relocation from the original Farmers building behind it.
The company had an initial lease of 15 years from October 1995 plus three three-year rights of renewal, the first of which has been exercised.
The property is producing net annual rental income of $555,539 and is expected to provide a new owner with a double digit income return on the sale price, says Mike Houlker of Bayleys Auckland.
He is marketing the property, which is part of Bayleys' latest Total Property portfolio, in conjunction with Ross Blomfield, Bayleys Whangarei and Sunil Bhana, Bayleys Auckland. It is up for tender closing on Thursday, December 6, unless sold prior by private treaty.
"The property is extremely well located in Whangarei's central business district and has excellent exposure with a large council car parking area directly in front of the premises," says Houlker.
"This has spaces for over 200 cars and is a popular parking location for shoppers coming into the CBD. Adding to the pedestrian flow into and through the building is an overbridge, which links the upper level of the Farmers' store to Bank St, one of Whangarei's busiest streets."
Pedestrian escalators and goods lifts connect both levels of the air conditioned building and the upper level leads into the adjoining Bank St Mall for which a new foodcourt is proposed.
Blomfield says the area is characterised by a number of similar arcade-type retail premises together with commercial office buildings.
The Farmers Building also overlooks Laurie Hall Park, named after a former Whangarei town clerk, which features a man-made waterfall, a spectacular hillside of floral gardens, open grassy areas, a children's playground and public seating.
Blomfield says with the Farmers lease having a final expiry of 2019, if the next two rights of renewal are exercised, the property has redevelopment potential in the longer term.
"It is possible that the building could be subdivided into smaller tenancies.
"Local businesses looking for a good position in the tightly held CBD retail precinct, which has traditionally been dominated by national retailers, could well be interested because of the property's prime position in a high pedestrian count area.
"In the meantime, the property is generating significant income from the Farmers lease."
Blomfield says that with no significant suburban shopping malls in the greater Whangarei area, the focus for specialist brand retailing continues to be within the central Whangarei CBD, with a number of CBD fringe locations catering for bulk retail in large-format outlets.