Retail block with 'huge potential' up for grabs

1-19 Devonport Rd is for sale for the first time in 14 years with two investors and a developer all actively pursuing the prime piece of property. Photo / Supplied

A major retail block in Tauranga's CBD is up for sale with two investors and a developer actively pursuing the prime piece of property valued at more than $12 million.

The 1797sq m area on the corner of Devonport Rd and Red Square, which houses businesses such as Bravo, has the potential to be demolished and redeveloped into a retail, residential and office block up to 49m high.

Most of the current tenants have a demolition clause in their leases so would have to leave after 12 months' notice if the buyer called for it.

The site - made up of two adjoining buildings - is up for sale for the first time in 14 years and has a combined capital value of $12.3 million (as at July 2012).

Today's news comes just days after the Bay of Plenty Times Weekend reported the Farmers Tauranga site, on the corner of Devonport Rd and Elizabeth St, was also for sale - with plans for a major revamp in the pipeline.

The deadline for private treaty for the 1-19 Devonport Rd site closed last Thursday and Ray White Tauranga commercial agent Denis McMahon said they were now working with three prospective buyers.

Investors would probably just look to fill the empty spaces upstairs but developers would be looking at what they could do to the block in the medium to long term, Mr McMahon said.

"To me this is the most significant land holding that's come up right in the centre of the CBD. It has huge potential."

With more than 20 current tenants, there was a lot of work for prospective buyers to do before the sale was secured, hopefully in the next four weeks, he said. The site is made up of two buildings - the Mid City Complex and the Davies Building.

Originally built in 1985, the Mid City Building is on the corner of Devonport Rd and Red Square and currently houses retailers such as Bravo, Pascoes, AMI Insurance, Strandbags and Ebony. The Davies Building next door was built in the 1930s and houses retailers such as Whitcoulls and AJ's Lotto and Tobacco.

Eleven office tenancies occupy the upstairs of the two properties.

If the successful buyer chose to redevelop the block, they would have to give tenants 12 months' notice to vacate but could negotiate for them to return into the new development.