Felix Café has occupied this unit at 128 Wakefield St, Wellington, since 1998.
Felix Café has occupied this unit at 128 Wakefield St, Wellington, since 1998.
A small investment property leased to Wellington's popular Felix Cafe is for sale providing a rare opportunity to purchase an affordable commercial property in a tightly-held capital city spot.
"This unit titled property has been home to Felix Café since 1998," says Peter Wilkin of Colliers International who, with colleagueGeorgina Young, is marketing Unit 1 at 128 Wakefield Street for sale by deadline private treaty closing on Thursday August 18.
"The Felix Cafe operators have just signed a new lease to occupy the space for another nine years, with a right of renewal which gives the cafe a potential total term of 12 years," says Wilkin.
"Felix is a longstanding institution in the lower Cuba St precinct with a proven operator at the helm. It's a constantly busy spot, filled with local office workers, tourists and students. The fact that the café has signed up for a long extension to its lease term shows its commitment to this location, and also makes for an excellent investment proposition."
Young says the property's prime location on the corner of Cuba and Wakefield Streets, close to Civic Square, Michael Fowler Centre and the Old Town Hall completes the package for investors.
"The combination of a highly-visible corner location in a high foot- and vehicle-traffic area, along with a great tenant and lease term, means this property ticks all the boxes when it comes to the fundamentals investors are looking for."
The 182sq m property generates $130,000 in contract income per year, with rental increases built in. The cafe has access to an outdoor pavement area on Cuba St and a pedestrian thoroughfare through to Bond St gives it exposure on three sides. It is on the ground floor of a high-profile building which is a landmark in the local area.
Wilkin says the Felix Cafe unit is for sale at a time when commercial property is coming onto the radar of a bigger range of investors.
"With interest rates looking likely to stay low for some time, it has never been a better time to buy prime unit titled commercial investments. Units which offer a prime combination of location and tenant such as Felix Café don't come up very often, so we are expecting plenty of interest in this property.
"The current interest rate level means more investors are taking advantage of low borrowing costs to diversify their investment portfolios. Cash in the bank looks much less attractive with interest rates so low at the moment, so we're seeing buyers come to us to find good-quality commercial properties which can offer a very good income margin over cash investments."
Young says prime unit titles are particularly worth considering because of their affordability when compared with entire commercial buildings and they give people an opportunity to access the commercial market which is often out of reach for private buyers.
"Many commercial properties are not accessibly priced for individual investors, who might already own residential investments but want to diversify. Unit titles offer a way for individuals to buy a slice of a commercial building at a much more affordable price."
