Service centre part of a global trend

By COLIN TAYLOR

Mercer Country Stop, a popular stopover for truckers and motorists on State Highway 1 south of Auckland, has been put on the market.

The service centre, which also caters for local farmers, is being sold by Stevenson Trusts Company after a property portfolio "rationalisation".

Mercer Country Stop was developed seven years ago after sand dredging in the adjoining Waikato River ceased, rail operations halted and nearby Pokeno to the north faced a slow decline when the highway was realigned to bypass the township.

The Stevenson-built 2.5ha development on the Waikato River flats opened progressively from 1997 and has a Franklin District Council Business zoning. It incorporates a Mobil service station with a truck stop, and a food court where McDonald's, Pokeno Bacon, Stockman's Cafe, Gourmet Wine & Cheese, Mohair Craft, Mumbai Masala and Bookworm's Bazaar hold tenancies from 80sq m to 200sq m. An Irish tavern on the same site, but on a separate title, was sold some time ago.

To the north of the service station is 4.3ha of undeveloped land that holds the sewage plant and stormwater disposal settlement ponds.

Existing tenants pay gross rent of about $600,000 over 908sq m of lettable space. Many of the initial leases were for 10 years but the newer leases are between three and six years, a standard retail term in New Zealand.

Colliers International commercial sales brokers John Green and Charles Cooper say the rent provides good holding income while a new owner sorts out plans for developing the bare land.

New Zealand is following overseas trends where increasing traffic on the main highways has created a demand for standalone service centres. There is also a trend towards a wider range of convenience stores aimed at tourists and established service centres are prospering.

Green says Mercer Country Stop "could suit, for example, logistics operations, a small supermarket, a caravan park, craft outlets, boat storage, fruit and vegetable and discount butchery shops".

A lot of people use the Waikato River, in particular, rowing clubs and jet-boaters who launch craft immediately opposite the centre. Some form of accommodation for either sports teams or overnight stays could also be feasible.

Surrounding premises include the Mercer Cheese Factory retail outlet, liquor wholesaler, a tavern on Roose Rd and some small enterprises on the eastern side of SH1.

New development around the perimeter of Mercer Country Stop is expected to add profile to existing tenancies.

A small block of land on the corner of Roose and Riverbank Rds could be developed into a separate shopping centre and shed-style retail with a big carpark could be developed on the rest of the site.

Green says the property suits developers, owner-occupiers and investors. It has an income stream, expansion opportunities and will be in a strategic position when roading changes and improved access are finished in 2006.

And any development on the Roose and Riverbank Rds site will be in pole position when people come off the motorway.

Any new owner will have a few issues to grapple with. The self-sufficient development has its own water bore and sewage system, but both need capital expenditure, says Alison Hunter, Stevenson's property manager.

That aside, says Green, there are "unlimited opportunities" to add value to the centre.

Transit New Zealand's $74.5 million Mercer to Longswamp improvements will have a big effect on the make-up of the Mercer Country Stop's customers. At present, more than 80 per cent of people stopping at the centre are travelling north. Southbound motorists mostly travel straight past as they are forced to turn across oncoming traffic to get onto the Country Stop's off-ramp.

Excavations around the new Whangamarino Bridge near Mercer will form a cutting to split southbound lanes of the expressway as they travel over the hills south of Mercer to rejoin the northbound lanes south of the bridge.

A drainage system will be established in the hills between Mercer and the new bridge to stabilise the notorious swamp area the road will be built on. When the works are finished southbound traffic will be able to turn onto an overbridge that hooks into the Mercer Bridge and into the centre.

Another boost to the centre will be the expected increase in the district's population when the planned 650-bed Spring Hill prison is built at Meremere.

It could bring a further 300 permanent residents to surrounding areas.

Hunter says Stevenson's is selling to concentrate on other interests that include providing for the property requirements of the company as well as moving on acquisitions for investment and development purposes.

"We prefer to concentrate on our industrial sites and the industrial market and leave retail to people who have specialist knowledge," Hunter says.