One of Ellerslie's landmark properties, the 1920s-built Southern Cross building in the heart of the suburb's shopping precinct, is being marketed as an add-value opportunity for a new owner.
The building is for sale through Nicolas Ching of Bayleys Auckland, with tenders closing on September 30.
The Bew family opened the Southern Cross Picture Theatre in 1925 when it served the district as an entertainment centre and movie theatre until it was closed in 1962. It is a feature building on Ellerslie's historic walking trail.
Once the town's only cinema, the three-storey 980sq m building on a 439sq m site at 87-93 Main Highway, was converted to squash courts in the 1970s. It now has two retail units fronting on to the main street of Ellerslie, housing a cafe and hairdresser. There is a central arcade leading to the entrance to the squash courts and to the rear of the building are three other separate tenancies, including a book shop and the Ellerslie Business Association, which has contributed much to the revitalisation of the suburb's town centre.
The 698sq m squash centre, which occupies the top two floors, has four courts, a reception and bar area, pro shop and residential flat. There are also common amenities and a kitchen area on the ground floor.
The property is producing total net annual rental income of $152,043 from seven tenancies with leases ranging from one to six years.
The rear of the property has frontage to Findlay St, which also provides pedestrian access to the building, and it is highly visible from the SH1 motorway. A significant portion of the property's rental income comes from signage rights on the building that are leased to APN Outdoor Ltd.
Ching says the current owners have applied for resource consent to redevelop the building which would retain the existing main street facade.
This would involve removing the existing squash courts, extending the third floor to the rear, and building a new fourth floor above to create a total gross floor area of 1803sq m.
The redevelopment would result in a building containing a 402sq m cafe/restaurant on the ground floor; 413sq m of office space on both the first and second levels; a further 374sq m of office space on the third floor; and two residential units totalling 201sq m on the fourth floor.
"The plans and drawings for the redevelopment would be made available to a new owner and it would be over to them as to whether they pursued this or looked at other ways of adding value to the building, perhaps through refurbishment.
"As it stands at the moment, it's a well-located building in the heart of a busy township producing a good cashflow, with a spread of tenancy risk across seven leases," Ching says.
He says Ellerslie's shopping area has a low vacancy rate, with no empty shops on Main Highway, and has a number of good cafes, restaurants and fashion boutiques. The shopping strip is flanked by the Southern Motorway on one side and residential streets on the other, so there is little room for expansion and buildings are tightly held by investors.