A fully- leased, multi-tenanted commercial property with massive exposure and a superb tenant covenant is for sale in the affluent Napier suburb of Taradale.
Anchored by Tremain Real Estate on a 10-year lease, the 697sq m property at 2 Puketapu Rd occupies a commanding position on the high-profile, northeast facing corner of Gloucester St - Taradale's main thoroughfare.
The property earns $153,532 in net annual rent from five quality tenants, with a weighted average lease term of more than four years.
Colliers International has been appointed to market the property for sale by deadline private treaty closing at 4pm on Wednesday July 30, unless it is sold earlier.
Broker Dan Walker says it's a standout investment opportunity underpinned by impressive fundamentals.
"This property is the complete package. The high-profile location, multiple income streams, excellent tenant covenant and lease terms are all top-notch.
"Additionally, this is a modern, low-maintenance building, with an A-grade 100 per cent seismic rating and a hint of rental upside."
The strength of the location is evidenced by the presence of an ANZ Bank branch and a McDonald's restaurant on the opposite corners, Walker says.
"Both sites are trumped by 2 Puketapu Rd, which faces north and east and gets all-day natural light," Walker says.
"The property comprises a modern two-storey commercial building on a 417sq m site with Suburban Commercial zoning.
"It is leased to four office tenants and a popular local cafe, giving a split-risk income flow. Several leases are notably under-rented, providing future upside to this passive investment property.
Walker says a tight supply of office space through upper-class Taradale will continue to apply pressure to the market's rental rates.
Anchor tenant Tremains occupies 220sq m on the ground floor with frontage to both corner streets. The 10-year lease earns $56,675 in net annual rent, with two rights of renewal of five years each giving a final expiry date in January 2038.
Founded in Hawke's Bay by All Black and rugby legend Kel Tremain in 1970, Tremains is a real estate company that has grown significantly into new markets.
The company offers commercial and rural property services under the Colliers International brand in Hawke's Bay and other regional centres in the central North Island.
Local cafe Source occupies a 159sq m ground-floor retail tenancy on a three-year lease earning $41,650 per annum. Final expiry is in May 2026, with two rights of renewal of three years each.
Source offers fresh, home-made food with a full breakfast and lunch menu.
Sandbrook Law occupies a 75sq m ground floor tenancy on a four-year lease earning $18,500 annually. Two rights of renewal of four years each make for a final expiry date in February 2031.
Established by barrister and solicitor Karl Sandbrook, the firm's legal services include residential, commercial, agribusiness and rural law, as well as trusts, estates, asset protection, succession planning, family and employment law.
WellNZ occupies an 84sq m first-floor office on a three-year lease earning $21,175 per annum. A three-year right of renewal makes for a final expiry date in December 2023.
WellNZ works with organisations to manage injured employees through comprehensive rehabilitation by specialist case managers.
The company helps businesses to take advantage of the ACC Accredited Employers Programme and provides injury self-management options from four offices across New Zealand.
Computer Solution Engineering occupies 77sq m on the first floor. Its three-year lease generates $19,000 in annual income, with two rights of renewal of three years each giving a final expiry date in November 2026.
The company has 30 years of experience solving business problems with efficient software solutions. Its software covers a range of uses including crop management, packaging, supply chains and sales.
All five leases earn $157,000 annually - less $3468 in unrecoverable outgoings, making for a total net rent of $153,532 per annum.
Taradale is 10km southwest of Napier's CBD. It has an estimated population of 18,000, making it one of the most populous parts of Napier, which has around 63,100 residents.