Convincing converts

The property is currently occupied by a rehabilitation clinic. Photo / Supplied

Two converted former residential dwellings are among three standalone commercial and industrial properties in Bayleys' Total Property portfolio that are expected to sell at a price attractive to entry-level commercial investors.

The Tauranga District Council is selling a property at 10A Mitchell St in Tauranga. It was fully refurbished last August for tenant Pathlab Bay of Plenty, which provides diagnostic laboratory services to the Bay of Plenty region. It is being marketed by Brendon and Lynn Bradley of Bayleys Tauranga and will be auctioned in Tauranga next Wednesday, March 31.

Brendon Bradley says the property is in a proven location near the Greerton suburban retail area. Pathlab's initial lease term of five years and 10 months commenced in August last year and there is a further eight-year right of renewal. The net annual rental is $23,300 with a rent review due in July 2011 and bi-annually thereafter.

"Although the zoning here is Residential A, a resource consent is in place for Pathlab to operate their medical laboratory collection service from these premises," says Bradley

The compact 91sq m converted residential dwelling is on a 485sq m freehold site that includes carparks front and rear of the building. The interior has been extensively upgraded and provides an open plan reception and waiting area, three collection rooms, a storeroom, workroom and a staffroom.

"Location-wise, it's an ideal fit for Pathlab given that there are two medical centres within walking distance and a wide catchment to draw upon."

Another converted residential dwelling in Manukau City, with resource consent to be used as a physiotherapy clinic, is up for auction in Bayleys Auckland auction rooms also next Wednesday, March 31, and is being marketed by Brice Clark and Tony Chaudhary of Bayleys Manukau.

The single level 325sq m dwelling is located on an 809sq m site at 503 Great South Rd, Papatoetoe. It is occupied by South Auckland Physio, Sports and Rehab, which has been operating for 25 years and has a lease for six years from April 2009. The property is producing net annual rental income of about $60,000 a year. Clark says the property has substantial exposure to one of the busiest sections of Great South Rd, the main arterial road between Papatoetoe and Manukau's CBD. The building has had substantial alterations and extensions and includes a full rehabilitation gym.

Up for auction in Auckland on the same day is a 635sq m building, with a mix of retail space and warehousing, on a 1161sq m standalone freehold site on the corner of Greenmount Drive and Parkwood Place, in East Tamaki.

It is for sale through Mike Adams, of Bayleys Auckland, and John Bolton, of Bayleys Manukau and is producing total net annual rental income of $77,400. At the front of the building, accessed from Greenmount Drive, is a retail showroom of 300sq m, which is leased to Video Expo, part of an Australasian chain that has been there for years. It exercised the first of three three-year rights of renewal in 2008.

At the rear is high-stud warehousing of just over 300sq m plus some mezzanine space, which has two large roller doors and is accessed off Parkwood Place, and has security fencing surrounding it. It is occupied by Korea Motors on a four-year lease until December 2010 but the company has indicated in writing that it intends to exercise the first of two three-year rights of renewal Greenmount Drive is a feeder road that runs between the main arterials of Ti Rakau Drive and Harris Rd, and has several major roads feeding off it, including Parkwood Place.

"The property is in an extremely high exposure corner location surrounded by a mix of quality commercial and service businesses in a growth area of eastern Auckland," says Adams. "It's not easy to find a standalone property in such a main location in this sort of affordable price range - there are plenty of people who don't have the wherewithal to spend $1 million-plus on an investment property."