Fifteen shops within the renovated Wairau Junction retail centre on one of the North Shore's busiest roads will go under the hammer as part of Bayleys' Total Property portfolio.
"Nearly two-thirds of the outlets for sale in the retail convenience centre have net rental annual income of less than $50,000, putting them within the popular sub-$1 million sector of the commercial property investment market," says James Chan, of Bayleys Auckland.
Chan, with colleague Clint Barber and Damian Stephen of Bayleys North Shore Commercial, is marketing the shops, at 170 Wairau Rd, for auction individually on December 4.
They range from 35sq m upwards and are among a total of 22 tenancies in the 4800sq m Wairau Junction centre on a high-profile corner at the intersections with Target and View roads.
The property was bought by Midpoint Investments in a sale negotiated by Barber last year and has undergone considerable renovation.
"It was already a very sound building with a seismic rating of over 100 per cent of new building standard," says James Staples, the development manager for Midpoint Investments, which has a 20-year history of commercial projects.
"However we brought the property up to modern building standards through a systematic refurbishment, which has included installing new sprinkler systems throughout all premises.
"And we gave the exterior of the building a complete facelift.
"We also installed new facades on all of the tenancies to give then greater street appeal and their occupants stronger branding.
"In a number of cases, we have also worked with the existing tenants to reconfigure and renovate their interiors as well."
As a consequence, Midpoint has been able to secure a long-term commitment from existing occupants whose tenure was coming to an end but who have been prepared to enter into new leases for as much as 12 years.
Damian Stephen, a retail specialist at Bayleys North Shore Commercial office, who has worked with Midpoint to improve the centre's tenancy mix and attract new tenants, says the reinvigoration of the centre enabled several high-profile new occupants to be secured to complement strongly established and retained tenants.
New to the site, and included in the properties to be auctioned, are expanding national food and beverage operators.
Coffee Club has taken 175sq m of space on a 10-year lease producing initial annual rental income of $84,300, with two-yearly rent reviews to the Consumer Price Index (CPI) plus 2 per cent.
Other newcomers are Nando's on a six-year lease, Butcher Jacks on an eight-year lease, and Pita Pit, Curry Club, Jesters Pies and Citywide Tech all on 10-year leases.
The largest offering to go up for auction will be Valentines Restaurant, which has occupied one of the property's prime tenancies for the past 20 years.
Its premises have undergone a refurbishment and a reconfiguration and it has a new 12-year lease over 810sq m of space at an initial rental of $230,000 a year.
Other occupants to be retained and whose premises are for auction include Pizza Hut and Hell Pizza, plus some smaller outlets which include sushi and kebab takeaways, a hairdresser, a swimming and spa pool service provider and a vehicle finance company.
Rentals on these smaller outlets range from $23,400 a year, with four of them having an annual income of $30,000 or less.
All but two of the leases have built-in CPI increases, as well as market reviews.
"These types of lease are popular with investors because it means their income returns are inflation-proofed," Chan says.
"Four of the leases also have fixed rental increases of between 1 and 2 per cent in addition to the CPI adjustments.
"The refurbishing of the complex and future-proofing to an as-new standard also makes it attractive to investors, as does its strong location on a major arterial road."
Wairau Rd is a main connection with State Highway 1 and has an average traffic count of 30,000 vehicles a day.
There are several access points to and from Wairau Junction off Wairau Rd and View Rd and parking around the building for up to 155 cars.
The site is also on a major traffic-light controlled intersection with Target Rd, one of the main points of entry into the Link Drive shopping precinct.
Stephen says the Wairau Junction Centre complements Link Drive's larger-format bulk retail offering.
"The improvements that have been made to the property and the tenancy mix in my opinion makes it the best food hub between Takapuna and Albany," Stephen says.
"It is an ideal place to place to take the family in an area that previously had limited options.
"As a consequence, it is likely to benefit from growing patronage that will result in increasing competition for tenancy space there in the longer term."