Burger King's parent company has signed a new lease for the property.
The premises of fast food chain Burger King, in Station St, Napier, will be auctioned next month, offering investors the opportunity to secure a presence in the city's bulk retail hub.
Andrew Smith, of Bayleys Wellington, last sold the property to Wellington investors some 10 years ago. He says his clients are now looking to release capital from their property portfolio.
The property is being marketed in conjunction with Sam MacDonald of Bayleys Napier.
A re-negotiated 15-year lease is in place with established tenants Antares Restaurant Group Limited, the company that operates the Burger King NZ licence.
As with much of the surrounding retail environment, the 2964sq m site, at 190 Station St, is Crown leasehold land.
The 59sq m single-storey building sits on a fully sealed and landscaped site with 43 car parks and a vehicle drive-through facility.
Smith says the building was built in 1994 — coincidentally around the time that Burger King started trading in New Zealand — for the former fast food chain Georgie Pie and converted to a Burger King restaurant in 2003.
"Now into its 16th year of trading from the site, Antares Group committed to a further 15-year lease with two, five-year rights of renewal beyond that," he says.
"It's a full net lease with the tenant paying all outgoings on the building. Clearly, this location has worked well for their business which is just a two-minute walk to Reading Cinema and within Napier's bulk retail hub, where key national tenants include Pak'nSave, Countdown, Z Energy, KFC, McDonalds, Jetts Fitness, Warehouse Stationery and Harvey Norman."
The property returns a net income of $97,800 + GST, after ground lease commitments to the Crown are met.
MacDonald says the concept of leasehold land is familiar to those investing in Napier. "It's accepted that prime commercial locations in this part of Napier are generally subject to ground leases," he said.
"The presence of major national tenants with significant bulk retail functions in the immediate vicinity shows that it's a proven commercial part of the city and investors have taken on the leasehold commitments with some confidence."
The building comprises a reinforced concrete floor slab and foundations with concrete columns and steel portal frames. Wall cladding features textured cement finish to the rear part of the building with the balance featuring extensive use of aluminium-framed glazing. The roof is curved galvanised steel with pedestrian and drive-through canopies attached to the main structure.
"The internal fit-out is typical for Burger King with seating capacity for about 200 people," says Smith. "The building has recently been re-imaged to bring it up to speed with the current Burger King look and feel, which adds to the street appeal and the dine-in surrounds."
The latest Restaurant Association Hospitality Report (September 2018) finds that nationwide sales for the hospitality industry have continued to grow, with fast food/takeaway food recording the highest growth.
The takeaway/food sector is recording the highest growth, up 5.7 per cent, year-on-year, in 2018. In dollar terms, this translates to an increase in annual sales of $148m. The property, at 190 Station St, Napier, will be auctioned at Bayleys Wellington on August 8.