Located on Newmarket's premier street, 60 Broadway. Photo / Supplied
A refurbished investment property in Auckland's Newmarket is for sale with split-risk income from two quality tenants.
Located on Newmarket's premier street, 60 Broadway comprises a two-level, 856sq m commercial building recently renovated and seismically strengthened.
It sits on a 455sq m freehold site with Business Metropolitan Centre zoning, which allows for redevelopment in the longer term.
The property is leased to a high-end Chinese restaurant on the ground floor and business advisory firm OneHQ on the first floor.
The leases have a weighted average term of 5.8 years and return a total of $356,070 plus GST in net annual rental income.
Colliers International broker David Burley, who specialises in Newmarket sales and leasing, is marketing the property with colleagues Simon Child and Kris Ongley.
The team will see the property to auction at 1pm on Wednesday July 17, unless it sells earlier.
Burley says it is a chance to acquire a low-maintenance, passive investment property in a premium location.
"It's well positioned within the Broadway commercial precinct.
"Broadway is the beating heart of Newmarket — one of the best-established and fastest-growing city fringe areas of Auckland.
"It offers New Zealand's premier retail experience along with premium offices and a growing residential population.
"The property is an excellent investment proposition, with two quality tenants, a superb location, and intensive zoning providing for future redevelopment upside."
Child says the property was built in the mid-20th century and recently refurbished by the vendor.
"The extensive works have repositioned the building as an A-grade asset that takes full advantage of its 12m of frontage to Broadway.
"The building has an all-new internal fit out, upgraded fire system, new ducted air-conditioning, and new glazing and canopies to the Broadway frontage.
"Character elements such as timber trusses have been retained for aesthetic appeal, and carefully integrated with modern elements such as LED lighting and Japanese oak sarking.
"Full floor-to-ceiling glazing on both the upper and lower levels provides an open aspect to the vibrant Broadway streetscape and west to afternoon and evening sun.
"A full seismic upgrade has brought the building up to a 67 per cent NBS [New Build Standard] rating. Works included a new steel portal, new sheer walls and horizontal ties between the concrete floor beams."
The ground floor is split into two tenancies, both of which are occupied by HK Cuisine Group Limited. The larger 382sq m tenancy is on a six-year lease returning $158,820 in annual rent, while the smaller 77sq m tenancy is on a three-year lease returning $52,000.
Annual rental reviews are indexed to inflation, while market rental reviews are on renewal. The renewals have been structured to align both leases with a final expiry date in 2032.
The first floor comprises a 415sq m open plan office that has been fitted out by the tenant in a modern, minimalist design.
Tenant OneHQ was founded by a group of prominent New Zealand business leaders to provide back-office support and advisory services for small to medium enterprises. Services include accounting, IT, lending and advisory.
OneHQ is signed to a five-year lease returning $145,250 in annual rent, with a five-year renewal extending final expiry to 2029. Annual rental growth is locked in at 3 per cent, with the greater of 3 per cent or market at renewal.
Ongley says the property is at the northern end of Broadway, within walking distance of the train station and the Westfield Newmarket shopping centre.
"The immediate vicinity has seen a resurgence of commercial growth. New developments include Mansons TCLM's office development at 33 Broadway, which is anchored by Mercury, and planned new office developments at 47-49 George St and 108 Carlton Gore Rd.
"These and other projects are resulting in a significant increase in the local commercial population and associated flow-on activity.
"The property is also within walking distance of the Olympic pools, the Nuffield St retail precinct and numerous bus routes along Broadway and Khyber Pass R d."
The property's Business Metropolitan Centre zoning is second only to the city centre in overall scale and intensity. It provides for a wide range of uses including retail, office and residential and short-stay accommodation.
The appetite for land with this zoning is demonstrated by the recent sale of The Warehouse's adjoining 1.4ha site. The property changed hands to a developer in 2017 for $65 million.