The Placemakers complex in Kerikeri, one of the Far North's largest retail properties, will go under the hammer early next month as part of Bayleys' last big Total Property auction for the year.
With a long-term lease to the Fletcher Building subsidiary with built-in rental increases, the Kerikeri property is among the strongest offerings of over 100 commercial and industrial properties for sale nationwide in the portfolio, says David Bayley, the executive director of Bayleys Real Estate, who is marketing the property with Chester Rendell and Alan Broadbent of Bayleys' Kerikeri office.
"The sale represents a good opportunity to secure a prime investment property in an affluent provincial growth area with a 12-year lease to one of New Zealand's largest and most recognised companies which has a strong history of business performance," Bayley says.
The 3360sq m hardware and building supplies store, on a large land holding of 2.2917ha at 26 Mill Lane, Kerikeri, will go up for sale in Bayleys' central Auckland auction rooms on December 5.
The property comprises a stand-alone, large-format retail store, built in the mid-2000s, with a lease to Fletcher Distribution Limited, trading as Placemakers.
In addition to the Placemakers building and 6766sq m of surrounding yards, there is a three-bedroom 202sq m house and vacant land at the rear of the property.
The existing Placemakers lease commenced in 2006 and runs until 2018, with four rights of renewal through until 2041. It is currently producing net annual rental income of $546,695.
Bayley says a feature of the lease which will appeal to investors is the guaranteed rental income growth from three-yearly rental adjustments based on the increase in the Consumer Price Index.
The rent is also reviewed to market at each of the four lease renewal periods and cannot be less than the existing rent or greater than the annual rent payable in the previous 12 months plus 10 per cent.
Bayley says the residential dwelling and the 1.24ha block of vacant land at the back of the property also represent added-value opportunities for investors.
"The land allows for future expansion of the Placemakers complex or further development of the site, while the house offers an opportunity for additional rental income."
The Placemakers building has a main retail area of 1312sq m specialising in the sale of home improvement products; a timber drive-through area of 1493sq m; offices and amenities totalling 415sq m; and a 140sq m canopy.
Rendell says the building has been solidly constructed of tilt-slab concrete and steel.
The property is on the fringe of the Kerikeri township, about 1km from the town centre within the greater Mill Lane industrial area.
This zone comprises a compact grouping of predominantly industrial buildings ranging from lower-cost workshops to larger, more modern complexes, the Placemakers complex being the biggest.
The building occupies just over a hectare on the front half of the site.
Rendell says Kerikeri is the fastest growing area in the Far North with a 10 per cent population increase between the 2001 and 2006 census to 5856, with further growth since then. Kerikeri has a good range of predominantly local, and some national, businesses which service the area's major industries of horticulture, tourism, retail, wood product manufacture and construction.
"There's an active building market in the Bay of Islands driven by both the growing permanent population and holiday home-owners, particularly from Auckland and overseas, who are constructing very elaborate houses in a number of instances.
"Placemakers has a strong focus on the building trade as well as the DIY market and is well positioned to service the construction sector in the region," says Rendell.