Reap rural riches through rental return

The property has a prime location on SHI with plenty of car parking.

Healthy DIY chain tenant with secure long-term lease in wealthy Waikato

The sale of Bunnings Cambridge, south of Hamilton in the Waikato, presents an opportunity to acquire a large, quality retail premises leased to a national company brand in a high-profile location.

"This is a well-presented property with a first-class tenant," says Andrew Shaw, agent for Bayleys Hamilton, who with colleague Mike Swanson is marketing the property for sale through a tender process closing on February 20.

Shaw says Bunnings Cambridge occupies one freehold site at 26 Lake St and two leasehold sites on Lake St and Queen St.

"Bunnings has one of the town's longest-running leases, generating $298,931 plus GST annually following the deduction of ground rent. Under the existing terms the tenant will commence a new 10-year lease from the sale settlement date with three six-year rights of renewal," Shaw says.

Included are offices and amenities, warehouse, nursery and a timber yard. Total land area of the three titles is 6852sq m, with combined rating value of $4.22 million.

"The property is at one of Cambridge's most sought-after and thriving locations, on the corner of Queen St (State Highway One) and Lake St, less than 15 minutes' drive from Hamilton," Shaw says.

The Bunnings Cambridge building was purpose-built for the tenant in 2009. It has received ongoing upgrades and maintenance and has a seismic assessment rating of 100 per cent compliance with the building code. The site also features a large car park accessible from Lake and Queen Streets.

"There is a shortage of good quality investment properties for sale in Cambridge in this price bracket so this building will appeal to a large range of potential investors," Shaw says.

The central location makes up part of the northern precinct on Cambridge's busy arterial route and it is one of the most visible locations in the area. Neighbours to the site include Pizza Hut, Subway, McDonald's, Countdown and Mobil.

Bunnings is a leading retailer of home improvement and outdoor living products and a major supplier to project builders, commercial tradespeople and the housing industry in New Zealand and Australia.

The Cambridge property is one of more than 320 warehouses, stores, trade centres and frame and truss centres within the Bunnings network. Sales revenue across the 2014 financial year totalled A$8.5 billion (NZ$8.9 billion).

As at June 30 last year the group had 36,000 employees within 223 warehouses, 64 smaller format stores, 33 trade centres and three frame and truss centres operating across Australia and New Zealand.

The combination of a busy and highly sought-after central location; a long-term tenant serving a thriving New Zealand DIY industry; and good growth within the region makes the properties an attractive investment, Shaw says. "The property has excellent exposure and is well frequented by shoppers and residents."

"Bunnings caters to the ever increasing popularity of DIY with Kiwis." He says hardware stores continue to report high growth with recent figures showing that Kiwis spend on average more than $4 billion a year on hardware, building and garden supplies.

"Cambridge is the largest and most affluent town in the Waikato, with a high proportion of residents working in nearby Hamilton. The 15-minute commute will soon become even faster, with the new motorway due to be completed soon."

Cambridge's population is 18,700, according to latest Census figures.

Shaw says the region's established tourism market is flourishing, with visitors drawn to the new Avantidrome, a world-class facility centred on a purpose-built 250m wooden velodrome, Lake Karapiro, the Waikato River, a strong equestrian community, excellent cafes and a renowned farmers' market.

What's on offer?
The property: Bunnings Cambridge.
Location: 26 Lake St, Cambridge.
Agency: Bayleys Hamilton.
Sales method: Tenders closing Friday, February 20.
Features:
• In Waikato's most affluent town.
• High profile location.
• National brand-name tenant.
• Earns net annual rent of $298,931.
• New 10-year lease from sale settlement.