Upmarket complex a rare scene

Rialto Centre has 25 fashion, homeware and lifestyle stores, a seven-screen cinema complex, an award-winning cafe and an international food court. Photo / Supplied

Investors of smaller to medium-sized properties are being offered a chance to share the ownership of the Rialto Centre, a boutique shopping and cinema complex in the heart of the Newmarket retail precinct.

The property's current owner, Ladstone Developments, is strata titling the centre and is offering a range of freehold properties for auction or tender, including retail outlets with high-profile tenancies such as the ANZ and a variety of international and national fashion brands, as well as the Rialto seven-screen cinema complex.

Bayleys Real Estate is marketing the properties, with James Chan of Bayleys Auckland project-managing the sale of the units with the support of Mike Bayley, managing director of Bayleys Real Estate, and Alan Haydock, Nicolas Ching and Quinn Ngo.

The properties are being offered for sale as unit titled lots, providing the opportunity to purchase either individual or multiple retail properties.

The 11 Rialto properties are featured in Bayleys' latest Total Property portfolio and spearhead the strongest collection of retail offerings that Bayleys has taken to the market for some time, says Bayley.

"Prime freehold retail properties are particularly tightly held in Newmarket and rarely come on the market," he says.

"Properties that do are generally larger holdings that are in a price range that is out of reach of most investors."

Seven of the properties are being auctioned in Bayleys' Total Property auction on Wednesday, September 22, with net annual rental incomes ranging from $18,983 for a 25sq m outlet leased to The Pyjama Company.

Five have a net annual rental income of less than $125,000, making them accessible to smaller investors and family trusts, says Chan.

The Rialto Centre has 25 fashion, homeware and lifestyle stores, a recently refurbished seven-screen arthouse cinema complex, the award winning Baci cafe and an extensive upmarket international food court.

The properties for sale are located in two separate blocks within the centre - one facing Broadway, Newmarket's main street, and the other on the newly developed cosmopolitan Osborne St precinct, a boutique retail strip offering a pedestrian lane shopping experience.

The centre has a total area of 7940sq m, with the ground level occupied by retail units and the first floor housing the cinema complex, cafe and the food court, which is currently being refurbished.

Chan says the cinema, food court and homeware and art gallery outlets complement the centre's cutting-edge fashion retail offering.

"The high-end shopping experience, showcasing leading national and international brands offered by Rialto has made it popular with tenants and shoppers alike.

"The centre has been progressively maintained and refurbished, with the latest substantial refurbishment project undertaken in 2007/08 and additional work completed this year."

Chan says the centre is located on a high-profile 3964sq m site at the crossroads of two major arterials, Broadway and Khyber Pass. It is situated on the western side of Broadway, home to many larger, longer-term tenants in Newmarket. This section of the main strip also has the heaviest foot traffic.

He says the block within which the Rialto Centre is located is particularly popular with "followers of fashion".

A pedestrian loop, enhanced by recent streetscape upgrades, takes in Teed St, home of multiple fashion houses, the new boutique-style Osborne St and through the Rialto Centre back to Broadway.

"The success of Newmarket as a top-end retail zone is partly due to the large working population of about 20,000 in the immediate area and the affluence of surrounding suburbs such as Remuera, Parnell, Epsom," says Chan.

"However, Newmarket has also established a well-earned reputation as the 'fashion capital' of New Zealand, so it attracts shoppers from all over Auckland as well as visitors from outside the region."

The three largest properties in the Rialto offering are being offered for sale by tender, closing Wednesday, September 29, unless sold prior.

Two units totalling 969sq m, occupied by ANZ Bank and Kimberleys, and with substantial frontage to Broadway, are for sale together with a combined annual net rental income of $667,921.

ANZ has a six-year head lease until 2014, with one right of renewal for a further six years - producing net annual income of $410,332 - while Kimberleys has a three-year lease, with one three-year right of renewal.

Kimberleys is a New Zealand fashion retailer that has 14 stores nationwide.

The 1985sq m seven-screen cinema complex is also up for sale by tender with a 10-year lease to Rialto Cinemas from December 2005, with rights of renewal for a further 10 years. It is producing net annual rental income of $365,369.

Rialto Cinemas is owned and operated by a joint venture between Event Cinemas and Readings Cinemas and also has complexes in Christchurch and Dunedin. Its cinemas have access to films from all main distributors but offer a wider range of screenings than mainstream cinema chains, as well as many film festivals, making it popular with film buffs, says Haydock.

The third property for tender is Bendon's flagship New Zealand store, a 366sq m unit also located in a prime position on Broadway. It produces net annual rental income of $325,159 with a six-year lease to the company plus two rights of renewal of three years each.

Three of the properties for auction are located on Broadway and include shops occupied by Cue, a major Australasian fashion retailer that has a 107sq m outlet at the entrance to the Rialto Centre and produces a net annual rental of $184,142; Brave, opposite one of Newmarket's busiest pedestrian crossings and selling popular urban wear brands, whose refurbished 121sq m shop generates net rental of $124,572 per annum; and Specsavers, one of the world's largest optical retailers with 1000 franchise stores globally and occupying a 110sq m outlet for a net annual rental of $117,582, with a new six-year lease.

The remaining stores are located in the Osborne St precinct and include a 95sq m outlet occupied by Kooky Fashions, earning a net rental of $64,600 per annum; a 67sq m Starfish outlet delivering a net rental of $46,092 per annum; and twin shops totalling 153sq m that generate a net annual rental of $102,274, which are occupied by well-known New Zealand fashion labels Jennifer Jones and Robyn Matheson.