Rialto outlets feed investor appetites

Eight retail stores are for sale at the Rialto food court, including the Subway outlet. Photo / Supplied

Eight food-court outlets in Newmarket's Rialto Centre will go under the hammer next month as part of the final stage of the selldown of individual units in the boutique retail complex.

So far, 16 out of 17 units in the centre, put up for auction by Bayleys Real Estate, have sold either prior to auction or under the hammer.

There has been strong competition among bidders who are keen to secure a piece of prime Newmarket real estate, says James Chan of Bayleys Auckland, who has project-managed the sale of the properties on behalf of Ladstone Developments.

Ladstone has strata-tilted the centre and, in the third stage of its sale process, is auctioning eight first-floor food units in Bayleys Auckland auction rooms at 11am on July 6.

Chan is handling the sale with Millie Liang, also of Bayleys Auckland.

The units include a range of outlets in the food court, which is positioned strategically next to the busy Rialto Cinema complex. The properties for sale encompass a Subway, JJ's Cafe, Thai, Indian, Mediterranean and sushi outlets, an icecream parlour and a juice bar.

Chan says the units will appeal to passive investors looking for affordable access to one of New Zealand's strongest retail locations. Those with the shortest lease expiries are also likely to attract interest from owner-occupiers wanting to establish a foothold in the food court.

Net annual rental incomes on the units range from $24,800 to $63,264, with half under $30,000, and lease expiries vary from 2012 to 2018.

"The well-established food court's multicultural cuisine caters for all tastes and it has a pleasant ambience, with plenty of seating and a children's play area," says Liang.

"It draws its clientele from cinema-goers, shoppers visiting the popular Newmarket shopping precinct and from a substantial workforce of about 20,000 based in office buildings in Newmarket."

The food court shares the first floor with the independent arthouse Rialto Cinema complex.

"Rialto has access to films from all the main distributors, but offers a wider range of screenings than the mainstream cinema chains as well as many film festivals, making it popular with film buffs," Chan says.

The Rialto Centre is located in the heart of the Newmarket retail precinct with access from Broadway, the suburb's main street, and Osborne St, a cosmopolitan retail strip offering a pedestrian-lane shopping experience at the rear of the centre. The centre has 25 fashion, homeware and lifestyle stores, as well the seven-screen cinema complex.

Chan says the centre's main entrance is positioned strongly at the crossroads of two major arterials, Broadway and Khyber Pass, and is located on the sought-after western side of Broadway. The area is home to many of the larger, longer-term tenants in Newmarket and it also has the heaviest foot traffic.

The units so far sold in the Rialto Centre have mainly been fashion and homeware outlets plus an ANZ Bank, and have sold at yields ranging from 6 to 9.5 per cent.

Chan says the attraction of Newmarket as a high-end retail zone bordered by some of Auckland's more affluent suburbs, such as Parnell, Remuera and Epsom, underpins the long-term viability of the area.

"The amount of retail spend contraction has been smaller in Newmarket compared to more suburban and provincial centres.

"Consequently, Newmarket retailers have survived relatively intact."