Five interconnected buildings in the heart of Timaru's main retail strip are for sale — at a time when national and international tenants are seeking space in the port city's 'golden mile'.
The high-profile properties, in Stafford St, come with quality tenant covenants. There is also untapped rental potential within the offering.
Mitchell Wallace and Blair Young, of Bayleys Canterbury, say that despite the rise of e-commerce and changing retail patterns around New Zealand, provincial centres like Timaru have retained thriving main shopping streets.
"We can't underestimate the role that main streets play in these smaller towns and cities," says Wallace. "Stafford St has been at the heart of the Timaru district since the 1860s, after many of its earlier timber buildings were replaced with those of local blue stone and brick after fire swept through the street in 1868.
"There's plenty of character, charm and a true feeling of community engendered here." The properties for sale are home to Whitcoulls, Noel Leeming, BNZ and Trade Aid, with Wilson Parking managing the roof-top parking component.
Farmers, Ballantynes, Rebel Sport, Glassons and Kathmandu are all close by, along with the major trading banks.
Young says the five buildings are arranged in a 'U-shape' and benefit from three street access points.
"The buildings are generally in good order, with the Stafford St buildings recently reroofed, the roof-top parking area recently resealed and all buildings strengthened to a minimum of 67 per cent new build standard (NBS)."
Timaru council is developing a 'city hub strategy' to maintain a resilient city centre in the face of changing consumer patterns and expectations around sustainability.
"This bodes well for the new owner of this property portfolio as it confirms that investment and new ideas will support the ongoing vibrancy of the location," says Wallace.
Collectively, the property returns $548,092.32 net of all outgoings per annum. Whitcoulls has six years to run on its lease, Noel Leeming and BNZ have four years to run, after BNZ took an early three-year renewal, while Wilson Parking is on a monthly tenancy.
An additional 103.57sq m of prime Stafford St frontage is leased to Trade Aid, expiring in May 2020. Should Trade Aid not seek a new lease, this is potentially an opportunity to increase rental income. A full tenancy schedule is available on request.
With the exception of 363sq m occupied by BNZ on the floor above its storefront, the first floor of each of the buildings is vacant. This includes more than 1000sqm in the rear building which has direct roof-top parking access via a lift and stairs.
"While this space would benefit significant refurbishment, its concrete floors and generous ceiling height would be suitable for a gym, community centre, or entertainment uses, as well as more conventional office accommodation," says Young.
"Some restructuring of the Noel Leeming tenancy in conjunction with previous food court space could provide further upside for an investor."
Wallace and Young believe this provincial retail portfolio will have nationwide appeal.