Pent-up demand for quality commercial property in Otago and Southland has increased interest in a PlaceMakers premises that's for sale in Gore.
Mark Simpson, director of Colliers Queenstown, says the purpose-built, large-format retail and trade store has excellent investment fundamentals.
It sits upon a 3813sq m site — spanning five-titles adjoining the Gore Town Centre — the second-largest town in the Southland.
The property has a well-established, listed national tenant that has operated from the location since the 1980s; and it has been substantially expanded and strengthened over time to meet the needs of the tenant and statutory requirements.
The property is to be auctioned at 11am on March 7, unless sold earlier, and Simpson expects strong interest from both local and national investors.
"Our region's commercial property market has had limited opportunities of this quality and price range in recent times, making this a great chance to secure a top-notch, bottom-drawer investment," he says.
"The property had a rateable value as at 2016 of $1.7m and was built for PlaceMakers in the 1980s.
"It has since been substantially expanded and strengthened over time to meet both the needs of the tenant and statutory requirements.
"The tenant's ongoing commitment to the site is backed by a lease earning $108,838 plus GST in net annual rent.
"Three-yearly rent reviews are indexed to the lower of CPI [Consumer Price Index] or market rent, with the next review due on renewal in October 2021.
"The site, which spans five freehold titles at 10 Fairfield St and 6 Medway St, is in the centre of Gore's main commercial district.
"The quality mix of surrounding retailers includes The Warehouse, Countdown, Noel Leeming, New World, Regional Ford and Guthrie Bowron," Simpson says.
The property comprises a flexibly configured 1261sq m building providing a 450sq m retail showroom fronting Fairfield St, plus an adjoining 727sq m warehouse that serves as a bulk trade store, supported by a substantial secure yard with good vehicle and customer access.
The warehouse has a stud height of about 6m, allowing for drive-through truck access from the yard through to Fairfield St.
It includes about 84sq m of partitioned offices with a mezzanine floor above that has around 38sq m of storage and a 32sq m office and staffroom.
The fully security-fenced yard of about 2500sq m sits behind the main building, with a frontage to Medway Stgiving dual entry and exit access, in addition to the drive-through bulk retail exit.
The building was originally constructed in 1982, with bulk store and retail additions in 2004.
An initial seismic assessment in 2013 found the building met 78 per cent of new building standards (NBS). Additional strengthening works were completed by the current owners in 2015.
Tenant Fletcher Distribution Limited, trading as PlaceMakers, is the retail arm of Fletcher Building Ltd.
PlaceMakers is New Zealand's largest supplier of building materials and hardware, with more than 74,000 product lines and eight manufacturing plants nationwide supplying frames and trusses.
Each of its 61 stores — located from Kaitaia to Invercargill — is a joint venture with a local business partner. The company employs more than 2,100 people and serves over 300,000 customers.
Colliers' Rory O'Donnell says the property's Commercial zoning under the Gore District Council District Plan allows for a wide range of activities.
"These include offices, healthcare, education, visitor accommodation, residential, commercial recreation, and car parking."
O'Donnell says Gore provides a vital link in the Southland economy as the second-largest town in the region and is a drawcard for many with its combination of culture and heritage, its rural setting, and its range of modern facilities and amenities.
"The township sits on the Mataura River, with most of its population of some 7000 residents living on the Western side of the river. A further 5000 people live in the wider district."
Gore also services the surrounding farming communities, with the nearest major centre being Invercargill 64km to the Southwest.
"The property provides a very functional base for the tenants, but equally provides flexibility for a future change of use or reconfiguration of the site should the needs arise. This is often hard to find in the regional commercial market," O'Donnell says.