Retail units in one of the best locations in the CBD, in an area where there is rarely any vacant space.
For the first time in 20 years, two retail units in the heart of Auckland's CBD, and in one of the highest pedestrian count areas for a strip retail location in New Zealand, are up for sale as fully leased investment properties.
The two shops in the character building Broker House on the corner of Vulcan Lane and High St, are occupied by women's fashion boutiques Moochi at street level and designer gift shop, The Vault, in the basement. They are being offered for sale as part of Bayleys' Total Property portfolio through Henry Thompson and Stuart Bode of Bayleys Auckland.
Tenders are being invited for the retail units either separately or together, closing on July 26 unless sold prior to the closing date. Both shops, which have been owned by one investor for about two decades, are producing a combined net annual rental income of $179,246 which will continue to grow by 4 per cent per annum. Thompson says the two units are in one of the best locations in the CBD with one of the highest pedestrian counts and in an area where there is rarely any vacant space.
Its position as a top retail location is evident in the longevity of the tenancies, he says. The Vault has occupied its 98sq m premises for 16 years and Moochi its 93sq m shop for close to 10 years.
Moochi presently has a 10-year lease through to June 2018, plus a further 10 year right of renewal, which is currently producing net annual rental income of $145,717. The Vault has a six-year lease from April 2010, with a further six-year right of renewal, which is returning $33,529 per annum at present.
Bode says a feature of both leases is their fixed annual rental increases of 4 per cent. Given that the Reserve Bank has as one of its policy targets an annual inflation rate of between 0-2 per cent (with a Consumer Price Index increase of 1.6 per cent recorded in the March 2012 year), rental increases from the units should outstrip inflation by a comfortable margin, Bode says.
Thompson says Moochi has proved a very successful women's fashion brand having started life as a small design workroom in Mount Maunganui. Its first store was opened in the Broker House building and it has since expanded elsewhere in the North Island. Its business model is to produce small production runs to keep its in-house fashion offering fresh and personal.
The Moochi shop is set slightly above street level and accessed by a short flight of stairs. It comprises a main retail area of 77sq m with a 3m stud height, a small lunchroom, kitchen and storage area of 9.5sq m at the rear and a raised mezzanine of 6.3sq m.. There is ample natural light from large shop front glazing on to Vulcan Lane and High St which also gives it high visibility to passing pedestrians, says Thompson.
The Vault store also has a 3m high stud and natural light is provided by windows slightly above the footpath. The shop's retail area is approximately 65sq m and it has a 32sq m storage area. It is reached by stairs leading down from High St.
He says the units' location attracts a lot of destination shoppers, plus those who pass the building each day to reach the transport hub at Britomart or the ferry building at the bottom of Queen St.
The property's corner position is very strategic within one of central Auckland's major high end fashion precincts and surrounded by the CBD's strong cafe culture and commercial sector.