Tasty properties to whet investor appetites

Restaurants, cafes and travel agents are among nine properties that will go under the hammer in Bayleys' first commercial and industrial auction for 2010. Photo / Supplied

Cafes and restaurants again feature among nine properties that will go under the hammer in Bayleys first commercial and industrial auction for 2010 being held on February 24.

Similar premises attracted particularly strong competition in Bayleys' Total Property auction in December last year with a number selling at low yields. An Asian restaurant in Victoria St in Auckland's CBD and a cafe in the Sunnynook Shopping Centre on the North Shore both sold at yields of less than 6 per cent.

Chris Bayley, Bayleys Real Estate's general manager commercial and industrial, says cafes, restaurants and other "eateries" are popular with property investors because they are often located in strong retail locations which improves their chances of being re-leased relatively quickly should the tenant move out. They are also generally in compact premises, with rental income levels that put them within reach of smaller investors.

The latest properties are featured in Bayleys Greater Auckland portfolio which contains a variety of properties for sale or lease around the region.

A 118sq m recently refurbished ground-floor unit situated within a residential complex at 41 Pitt Street in central Auckland is one of the cafes that will be auctioned on February 24.

The property, marketed by Nicolas Ching of Bayleys Auckland and Tony Chaudhary of Bayleys Manukau, is occupied by the Apila Cafe on a six-year lease, with two 3-year rights of renewal. It is producing net annual rental income of $32,000 which Chaudhary says makes it very affordable for smaller investors.

Ching says the cafe benefits from a high profile location on a main arterial roadway with a large surrounding residential and office catchment.

In central Auckland a property occupied by a Japanese restaurant will also be auctioned. The 109sq m unit with a 20sq m courtyard and three car parks at 160 Symonds St, is being marketed by James Were and Scott Kirk, of Bayleys Auckland, and is part of a recently completed multi-storeyed, mixed-use complex with covered car parking to the rear.

The unit is occupied by the well-established Sakanaya Japanese restaurant, which has taken a new five-year lease from November 2009 at a net annual rental income of $55,200. A rent review is due in November this year and two-yearly after that, with one five-year right of renewal.

Were says the property is situated just north of the intersection of Khyber Pass, Newton Rd and Symonds St.

"The location offers a large customer pool from surrounding residential suburbs, apartment blocks, a substantial student population and surrounding businesses on the fringe of the CBD. It's in a very popular location that has undergone significant intensification in recent times."

Further south, a 148sq m two-level outlet in the Bishops Gate Business Centre in Botany South is being auctioned by Ching and Richard Yang, of Bayleys Auckland, in conjunction with Geoff Wyatt of Bayleys Manukau. This cafe is one of 10 units in a modern high profile complex on the corner of Bishop Browne Place and Bishop Dunn Place, just off Te Irirangi Drive.

B's Coffee Bean Cafe occupies the unit on a new five-year lease, with two five-year rights of renewal. Ching says the property is producing net annual rental income of $54,000 and is well positioned in a dominant retail location with a Mitre 10 Mega store and other high profile retailers close by.

Other retail properties which are part of the Greater Auckland auction include a 70sq m unit at 18 Gore St in Auckland's CBD, close to two of Auckland's landmark office buildings, the Vero Tower and Lumley Centre. The unit, which is being marketed by Mark Sun and Richard Yang of Bayleys Auckland Central, is occupied by Muse Beauty Therapy and is producing annual net rental income of $43,800 on a new 10-year lease with rental growth of 3 per cent per annum built into the lease. Sun says it represents a rare opportunity for a small investor to own a slice of the CBD.

In Papakura a 100sq m retail outlet that is part of the Selwyn Centre Shopping Arcade but which has direct frontage on to Great South Rd will also go under the hammer. It is being marketed by Tony Chaudhary of Bayleys Manukau and Mike Ashton of Bayleys Counties and is producing net annual rental income of close to $33,000.

Chaudhary says it is located in the heart of Papakura's CBD retail strip opposite three banks and, because of its pivotal position at the entranceway to the Selwyn Centre, enjoys high profile exposure both within the centre and on busy Great South Rd.

He says it is occupied by two well-established local businesses which have used the premises for a number of years. A travel agency occupies the bulk of the property, which is in two unit tiles, with a small newsagent's kiosk occupying the balance.

Two commercial units in Albany with a Korean connection are also part of the auction action.

One is a corner retail unit of just over 50sq m leased to an established Korean pharmacy at 6 Rosedale Rd at a net annual rental of $18,500. Richard Moors of Bayleys North Shore Commercial, who is marketing the property with Caleb Belling, says it is part of a modern commercial complex with high profile exposure to busy Rosedale Rd and has good access and parking.

The other unit located further up the road, at 239 Rosedale Rd, is leased to ETT International, publishers of the popular and widely read Korean magazine, Korean Town. The company has a three-year lease, with one three-year right of renewal on the 60sq m unit which is producing net annual rental of $14,300. It is being marketed by Belling and Terry Kim, also of Bayleys North Shore Commercial.

Belling says the two units would be ideally suited to small investors. "They will sell at a lower price than it would be possible to acquire a residential property for and provide a higher rental income return".

A high profile 569sq m site with redevelopment potential on the corner of Great North Rd and Taurakina St in Grey Lynn is being marketed for auction through Phill Priestley and Mark Sun of Bayleys Auckland. Part of the property is being used as a car yard and there is also a 224sq m two-storeyed brick and tile bungalow which has been leased for residential use. The property is being offered for sale with vacant possession.

Priestley says its mixed-use zoning would permit a wide range of uses.