A popular suburban retail centre in Ferrymead, Christchurch, encompassing 12 fully-occupied tenancies on long-term leases, has been placed on the market for sale.
The complex offers investors a significant holding that generates a net annual income of over $1 million, says Jonathan Lyttle, Christchurch managing director for Savills, who is selling the property by tender closing on March 15.
Lyttle says Ferrymead Central, on the corner of Ferry Rd and Waterman Place, is a well-established centre and home to a diverse range of high quality national and local retailers, hospitality and service providers including Speight's Ale House, BNZ Bank and Ferrymead Medical.
He says the centre has proved very popular since it opened in 2008, owing to its main road location and good tenant mix.
"This is an ideal long-term asset for property investors, with a high-profile position, good variety of quality tenants and an excellent history of occupation.
From an investment point of view, it has all the makings of a secure, income-generating holding."
Speight's Ale House anchors the development, occupying the largest unit on a 20-year lease. The centre also includes well-known eateries Casa Nostra, Winnie Bagoes and @Tony's Japanese restaurant.
Ferrymead Medical, BNZ, Snap Fitness, Cafe Del Mar, Vet-Ent, Bottle-O liquor store, Espresso Carwash Cafe and a billboard make up the remainder of the rent roll, providing investors with a well-diversified income across the retail, food, medical and services sectors, says Lyttle.
The 12 leases generate total rent of $1,091,387. All the tenants hold long leases of at least eight years, with five of the tenants on extra-long lease terms of 20 years or more.
"The centre includes a very high quality range of tenants, including a bank, medical centre and several well-known restaurants and bars, which have helped Ferrymead Central become a destination for a very large customer catchment across Christchurch."
"A number of the tenants are founding occupiers in the development, having been there since Ferrymead Central opened in 2008. They are now very well established and known throughout Christchurch, and enjoy good trading due to the high-profile location on a busy arterial road."
While the centre provides a very strong long-term investment proposition as is, the buyer could also investigate the possibility of converting the units into individual unit titles and on-selling them to smaller-scale investors, Lyttle says.
"There is very high demand in the market for smaller retail investments at the moment, so the potential to divest some or all of the units on individual titles could be a strong add-value option for the buyer.
"Small commercial investment properties have wide appeal owing to the current low borrowing rates and lending restrictions in the residential market. The smaller end of the retail investment market is now showing real strength, especially in high-profile locations."
Ferrymead has emerged as a prominent commercial hub in the past decade, with the area servicing a large local population. Local businesses also benefit from high visibility to passing traffic along Ferry Rd, which connects central Christchurch with the affluent eastern suburbs.