Mid City Plaza, a meticulously refurbished heritage building with six national and international brands among its nine tenants, is for sale in the heart of Napier's Art Deco precinct.
"The property was recently refurbished and seismically strengthened to exacting modern standards, while retaining the essence of its character charm," says Dan Walker of Colliers International Hawke's Bay who, with colleagues Josh Coburn and Blair Peterken, is exclusively marketing the property for sale by deadline private treaty closing at 4pm on Thursday June 20, unless it is sells earlier.
"This sale represents an opportunity to acquire a landmark Napier property with investment fundamentals that equal its character," Walker says.
"Built between 1920 and 1933, Mid City Plaza is one of the largest retail holdings in the central city in terms of land area, floor area and annual rent roll. It's a true trophy asset thanks to its strong heritage, prime location, excellent condition and superb tenant mix."
Walker says the property at 205 and 221-223 Emerson St occupies a commanding site with three high-profile effective frontages to Emerson St and Dickens St.
"Fully occupied by nine retail tenants, including national brands Nood, Stirling Sports and Crackerjack, and international brands Specsavers, TS14+ and Black Pepper; the property earns $746,128 in net annual rent and has significant potential for rental upside given Napier's low-vacancy market.
"It is well situated within the Art Deco Quarter under Napier's District Plan – a location that is particularly popular with tourists and attracts some of the highest rental rates in Hawke's Bay."
Walker says the retail tenants contribute the bulk of the property's secure income stream, with the balance coming from 20 on-site car parks and a prominent billboard at the Dickens St end of the property. "Well-known names account for more than two thirds of the property's rent roll."
He says the rental review mechanisms are regular and diverse, including fixed percentage increases, inflation-indexed reviews and market rent reviews.
Mid City has a weighted average lease term of more than four years, with tenants including:
· Nood - well-known designer furniture retailer, which has operated since 2007 and now has 16 stores across New Zealand;
· Stirling Sports - a nationwide sporting goods and clothing retailer, which opened its first store on Auckland's Dominion Rd in 1964 and now has 54 franchises across New Zealand;
· Specsavers - a multinational optical retail brand, founded in Britain in 1984, which now employs more than 30,000 staff worldwide, particularly throughout Britain and Australasia;
· Adore Collection - a family-owned jewellery, gifts and accessories store founded in Auckland 30 years ago and recently relocated to Hawke's Bay;
· Boardzone – an established local surf and streetwear stockist successfully trading since 2011;
· Sai Restaurant – an upmarket and modern Thai restaurant with an excellent online review rating;
· Crackerjacks – a New Zealand-owned bulk retail discount specialist, launched in 2009, which now has 14 sites across the North Island;
· TS14+ – a fashion shop for plus-size women with more than 140 stores across Australia and New Zealand, and;
· Black Pepper - a women's fashion brand, established in Australia in 1976, with 22 stores in New Zealand and dozens more across the Tasman.
"Overall, this is an outstanding property, expected to have major appeal to passive buyers seeking a positively geared commercial investment," Walker says.
Coburn says the property's merits are underpinned by its rich history and strong character. "Heritage-protected facades at each end of the property have been brilliantly maintained, with each telling a story predating the 1931 Hawke's Bay earthquake.
"Beautiful Art Deco facades are a notable feature of Napier's commercial landscape, but two within one property are a true rarity.
"The property is in excellent overall condition, with an upgraded exterior, earthquake strengthening and new internal fit outs throughout."
Peterken says the property has an approximate net lettable area of 3177sq m on a 3546sq m freehold site across two titles.
"Mid City comprises a number of interconnected buildings between Emerson St and Dickens St," he says.
"The two-storey Dickens St building – designed for the Hawke's Bay Farmers Co-operative Association by local architect EA Williams – was built in the 1920s and survived the 1931 quake.
"This building was recently strengthened with significant investment from the vendor along with a $150,000 grant from the government's Heritage Earthquake Upgrade Incentive Programme."
Peterken says the work included removal of the unreinforced concrete first floor; construction of a new first floor with a timber diaphragm structure; steel bracing on the first floor; and construction of shear walls and foundations on the ground floor, tying in the existing walls and columns.
"These internal works did not compromise the building's stunningly refurbished facade, which is its most significant heritage feature."
Walker says the property's retailers benefit from Napier's popularity as a domestic and international tourist destination.
"A record 87 cruise ships are scheduled to berth at Napier Port during the 2019/20 season, which runs from October to May, bringing more than 230,000 visitors to the city.
"Many of these tourists will be attracted by Napier's concentration of 1930s Art Deco architecture, built after much of the city was razed in the 1931 Hawke's Bay earthquake.
"Wine and food are also strong tourism drawcards, with Napier being recognised as the centre of the important Hawke's Bay grape and wine production area."
Napier has a smaller population than the neighbouring city of Hastings but is regarded as the main centre of the Hawke's Bay due to its closeness to the region's seaport and main airport.