A recently built four-storey office and hospitality property is for sale in the Tauranga dining precinct.
Colliers International Tauranga MD, Simon Clark, says the high-spec building at 49-51 The Strand offers stunning harbour views.
It is fully leased to four long-term tenants, all of whom have invested in high-quality fit-outs, providing a split-risk income with long-term leases, built-in rent growth and personal lease guarantees.
The property is to be auctioned at 11am on February 21, unless it sells earlier.
"The location, superb building quality and strong tenant covenant make it the ultimate waterfront trophy investment property," Clark says.
"The ground floor is occupied by an experienced restaurant and bar operator, while the upper levels are leased to three quality office tenants. Investments in this prime CBD waterfront location rarely come available, especially with such a secure rent income and a brand new, high-specification building."
Colliers' Duncan Woodhouse says the property was developed by Strand Commercial Properties and built by local construction experts iLine Construction. It comprises a 985sq m office and retail complex on a 294sq m freehold site with Commercial zoning.
"Premium elements include floor to ceiling glass facades, a butterfly roof with 4m-high windows, a glass curtain wall to the lift lobbies, and redwood soffits and louvres," Woodhouse says.
"The development also makes the most of expansive views with 114sq m of large, sheltered decks over three levels."
The property earns combined net rent of $362,770 plus GST and outgoings, with lease terms of between six and 10 years.
The ground floor hospitality space is leased by Hereford and Farm Produce Limited, which also runs the popular Alimento Cafe on First Ave and the Elizabeth St Cafe. The 238sq m tenancy is split into two distinct offerings – Otto Eatery, and Oscar Restaurant and Wine Bar – which share a kitchen and facilities. Otto is among the only cafe establishments offering coffee during the day to service the large number of office staff in the area. The company is signed to a 10-year lease earning $110,670, with six rights of renewal of six years each. Rent reviews are yearly to Consumer Price Index (CPI), capped at 3 per cent, and every five years to market, capped at 10 per cent.
The upper office levels are each 241sq m with 38sq m balconies. They are tenanted by real estate agency Sotheby's, property valuation firm Telfer Young, and insurance brokerage Financial Independence.
Sotheby's Tauranga, which is operated by Colliers Hawke's Bay and rural franchisee Tremain Group, occupies the first floor on a six-year lease, with a single five-year right of renewal.
The lease earns $86,300, with market rent reviews every three years.
Telfer Young, which occupies the second floor, is signed to an eight-year lease earning $76,800, with five rights of renewals of five years each. Rent reviews are yearly to CPI, capped at 3 per cent, and every four years to market and on renewal.
Top-floor tenant, Financial Independence, is signed to a six-year lease earning $89,000, with six rights of renewal of six years each.
Rent reviews are yearly to CPI, capped at 3 per cent, with market reviews on renewal.