Park properties on the market

Two properties at The Park Megacentre in Hastings are on the market.

The properties on the controversial large-format retail development are being offered with long leases in place.

The successful Karamu Rd development is anchored by The Warehouse and Mitre 10 Mega. The properties housing Fishing Camping Outdoors (FCO) and Angkor Wat Kiwi Bakery and Cafe, are offered for sale by deadline private treaty, closing on August 2.

Jude Minor, of Colliers International, said the units were currently on one freehold strata title, although a process was under way to subdivide them into two individual titles - so they were for sale either individually or together.

"The long term, solid tenant covenants in place provide income security, with income growth built in through annual rent reviews," he said.

"The properties are also brand new - having been constructed in February this year - so they are low maintenance, designed to modern earthquake standards and of very good quality.

"We believe these properties are ideal for a variety of investors - family trusts, small syndicates or individuals - who want to take advantage of low interest rates and diversify into commercial property."

The two leases provide a combined net annual rental income of $371,726.

FCO occupies 1403sq m of net lettable area on an eight-year term dating from March 2012, with the right to renew for two further terms of seven years each, giving a possible final expiry of March 2034. Annual rent reviews of 3.5 per cent are in place.

FCO's parent company, Super Retail Group, is listed on the Australian Stock Exchange.

"The FCO chain launched in New Zealand in 2011 and now operates 13 successful stores throughout the North Island, with Hastings the newest addition," Colliers International marketer Tony Allsop said.

Angkor Wat Kiwi Bakery occupies a 150sq m tenancy with outdoor seating and an adjoining playground. The bakery holds a seven-year lease with the right to renew for two further terms of four years each. Annual income growth is provided through fixed rental increases.

The bakery operators had successfully owned and managed other bakeries in Waipukurau and Napier, Mr Minor said.

The centre opened in September 2011 and is intended to provide 25,000sq m of retail space and 780 carparks when fully developed. Other large-format retail tenants in the vicinity include Noel Leeming and Bunnings.

Developer Charter Hall has said a 1000sq m minimum store size that was imposed on the development, with the exception of the cafe site, had proven to be a barrier for potential tenants.

The company had lodged a resource consent application requesting the floor area of the development be reduced to between 500 and 670sq m but in January it decided to put the application on hold.