A landmark Onehunga commercial property, the M. Bray & Co building constructed in 1906, is for sale, fully leased with multiple retail and office tenancies generating net annual rental income of about $560,000.
The two-level character premises at 235-245 Onehunga Mall is being marketed as part of Bayleys' latest Total Property Portfolio by Tony Chaudhary and Janak Darji, of Bayleys Manukau, in conjunction with James Chan, of Bayleys Auckland. They are selling it for a group of investors by tender closing on September 20, unless it sells beforehand.
The building is on a substantial 1990sq m freehold site, with extensive car parking at the rear and directly opposite the Dress Smart shopping centre, which attracts more than 2.5 million customers each year.
"The property is in a very high-profile position in the heart of the Onehunga commercial precinct with an income stream from a mixture of ground floor retailers and office occupants on the first floor, which provides sought-after risk diversification," says Chaudhary.
The early 20th century building was originally the premises of Ivan Whale Cartage Contractors and Suppliers. The car park at rear was the head depot for a large fleet of horse-drawn drays and, later, trucks.
Chaudhary says the owners of the property undertook a major refurbishment and expansion of the building when they acquired it in 2002.
They extended the rentable areas for most of the shops and provided dual entrances and frontage from them on to Onehunga Mall and the rear car park, which shares a service lane, Brays Rise, with the Dress Smart complex.
"The current owners have added considerable value to the property by enhancing its tenancy profile and attracting a number of prominent retailers and food and beverage businesses," says Chaudhary. "The six ground-floor tenancies have lease terms of six to 12 years, which is testament to the strength of the location, along with a good spread of expiry dates from 2014 to 2023. Five of those leases have fixed annual rental increases of between three and four per cent, which provides assured rental growth to a new owner."
The largest ground floor occupant is NZ Post and Kiwibank, which occupies 287sq m of space on a nine-year lease from 2010, with two further three-year rights of renewal. Other occupants of the 1030sq m ground floor include Paper Plus, Nandos, Sierra Cafe and Curry Leaf.
Chaudhary says the character office space with its polished timber floors on the 600sq m upper level has proved popular with local professional firms such as accountants and lawyers. One of the first floor tenancies also has resource consent for residential use.
He says the leasing of this floor will continue to be the responsibility of the vendors, who have considerable property management experience and who will take a head lease over all of this space until mid 2019 at a net annual rental of $135,000.
The Bray Building has concrete foundations with plasterboard concrete and double brick exterior walls. Chan says the character features of the building have been retained in its refurbishment although as part of the upgrade, older roof linings on the upper floor have been replaced with a suspended ceiling in some places and new steel and aluminium joinery incorporated into the external walls.
The property is zoned Business Activity 2 providing for retailing, office and commercial service activity at a medium intensity suburban level, with a maximum height restriction of 12.5m.
It falls within the proposed zone of "Town Centre - Onehunga" in the draft Auckland Unitary Plan, which provides for some buildings of between four to eight storeys high to facilitate increased office and residential living opportunities on upper floors.
"While the property is first and foremost an exceptional investment opportunity, the significant size of the site also means there could be potential to utilise the land at the rear more intensively at some stage in the future and add further value to the property," says Chaudhary. "Longer-term, the property is likely to benefit from continuing growth in the surrounding town centre area."
Chan says the building has extensive frontage on to busy Onehunga Mall, a major arterial which links the southern slopes of One Tree Hill to the north and Manukau Harbour to the south and has strong vehicular and pedestrian traffic flows. The rear car park is accessed off Paynes Lane, which also provides access to one of the main entrances into Dress Smart across the street. The tarsealed land area at the rear of the property provides on-site parking for 21 cars, catering for the office occupants upstairs, as well as customers of the retail tenancies.
"This is a very busy retail precinct servicing the surrounding established residential suburbs of Onehunga, One Tree Hill, Hillsborough, Mt Eden and Mt Roskill, with the hugely successful Dress Smart mall also drawing many other shoppers from around the Auckland region," says Chan
He says the property has excellent access to motorways and public transport.