Exterior elevated view of big bulk retail property for sale at 85 Cavendish Drive, Manukau.
Exterior elevated view of big bulk retail property for sale at 85 Cavendish Drive, Manukau.
A fully occupied large bulk retail property on a high profile Manukau site on a busy arterial road and with split risk income from several tenants will go under the hammer next month.
"This spot in central Manukau, is hard to beat as an investment location," says Charlie Oscroft of Colliers International who, with colleagues Leroy Wolland and Gareth Fraser, is marketing 85 Cavendish Drive for sale by auction at 11 am on November 18 at the agency's 151 Queen St, Auckland CBD office - unless it sells before auction day by negotiation.
Charlie Oscroft, of Colliers International.
Oscroft says the tenants in the centre are Big Save Furniture, Smart Marine and Reece Plumbing.
"It's on a very prominent 1.1 hectare freehold site opposite the Manukau Supa Centa, which is one of New Zealand's largest dedicated large-format retail centres," he says.
"This is a well-established bulk retail precinct known to many people as a convenient retail destination. Several major retailers are here including: Spotlight, Mitre 10 Mega, Bunnings, Harvey Norman and Kmart."
The centre has very low vacancy levels and its position with a wide frontage and dual access to Cavendish Drive allows it to captures a steady flow of customers, Oscroft says. "Add in the large land holding, a functional building, three national and international-brand tenants, and this property hasa very attractive set of investment fundamentals."
Cavendish Drive, which is the main arterial road linking the south eastern suburbs with Auckland International Airport, was recently widened to four lanes and carries about 35,000 cars a day.
Leroy Wolland, of Colliers International.
Wolland says the property was significantly upgraded and refurbished in 2007 and now makes an ideal low-maintenance holding. "The building has an A-grade seismic rating and is in good condition, serving the tenants very well with open floor space, plenty of car parking and good access for deliveries. It is a very functional and easily-lettable property."
The building has 3893 sq m of floor space with additional canopied loading areas and 162 off-street car parks. A large yard provides room for truck movements to supply the businesses.
Oscroft says Big Save Furniture has occupied the property since January 2008 and has recently demonstrated its long term commitment to the location by extending its lease through to 2020. The New Zealand family-owned and operated company has 23 stores around the country, employing around 350 people.
Reece Plumbing is a major Australian publicly-listed company with 360 stores and over 3000 staff. It entered the New Zealand market in 2006 and has eight stores in Auckland. The business has operated at the property since December 2007 and holds a lease extending to 2021.
The newest tenant, Smart Marine, is another family-owned New Zealand business. It is due to open its new store in the building in November, which will be the company's fourth outlet. The business has signed a new 12 year lease.
The three tenancies generate total net contract income of $714,436 a year on a weighted average lease term (WALT) of 6.7 years.
Wolland says there are limited opportunities to develop further bulk retail properties in the area and this increases the property's scarcity value.
Gareth Fraser, of Colliers International.
"Retail vacancy rates in Manukau are low and a reflection of the limited land supply," he says. "In addition, the property's strategic location near motorways and surrounded by a large residential catchment will make this a sought-after addition to investor portfolios."
Fraser says the split risk characteristic of the centre will be another draw card. "Multi-tenanted investments like this one are always popular due to their diversified cash flow and reduced income risk if a vacancy arises."
He believes the property's strong fundamentals, and continuing popularity of retail properties among investors, will result in a busy auction room. "It will potentially be one of the biggest commercial auctions seen in the country this year," Fraser says.
