Milford New World. Photo / Supplied
For the first time in 48 years, the building housing the New World supermarket in Milford, on the North Shore, is on the market.
The 1996sq m freehold property at 141 Kitchener Rd is being marketed for sale by auction through Euan Stratton, Shoneet Chand and Deborah Dowling of Colliers International and is scheduled to go under the hammer at 11am on November 21 at 151 Queen St, Auckland, unless it sells prior.
Stratton says the sale presents an opportunity to acquire a prime retail property in one of the North Shore's most established retail precincts, with an exceptionally strong and longstanding tenant in place.
The supermarket generates a solid income stream, with provisions in place for the annual income to be either the base rental of $330,000 net, or 2 per cent of the store's gross turnover, whichever is greater.
"This provides a reliable income for the property's owner, with the potential for future rental growth with rent reviews every three years," Stratton says.
"The building constitutes an excellent investment holding, given its location in an affluent area, its large and loyal customer base and the backing of one of New Zealand's most recognised food retailers."
The property is leased to the supermarket's local operator on a nine-year lease dating from April 2005, with the right to renew for a further three years. The lease is guaranteed by Foodstuffs (Auckland) Limited, New World's parent company.
Stratton says the sale gives owner occupiers or developers the chance to purchase a premium property with a view to future redevelopment.
Chand says Foodstuffs' strength, combined with the proven trading history of the supermarket, provides a very strong covenant. "The store has been operating in Milford since 1964 and was one of the first New World-branded supermarkets in New Zealand."
Foodstuffs is New Zealand's largest retail grocery retailer, operating more than 700 independently-owned supermarkets and other retail outlets.
The single-level, standalone building has a total floor area of 1797sq m and was purpose built for the supermarket. It includes 1310sq m of retail area made up of the main shop floor, preparation spaces and butchery, produce, deli and bakery areas.
To the rear of the building, two unloading areas are serviced by a right of way. Mezzanine offices and staff amenities are accessed via a staircase from the main shop area.
Dowling says the building has a wide shop frontage in the centre of the busy Milford retail precinct. "The supermarket entrance is on a stretch of Kitchener Rd that has the highest pedestrian count in Milford."
Dowling says Milford has been recognised by the Auckland Council as a key North Shore "town centre" and an area earmarked for increased density future development, where intensification, including residential intensification, is proposed.
Chand says many investors view supermarkets in good locations as the ideal recession-proof investments, offering strong income security during uncertain times.