A well-performing neighbourhood shopping centre in Sommerville, in the east Auckland suburb of Howick, is for sale, with agents projecting its freehold site of close to two hectares could future-proof the property's investment potential over time.
The Meadowlands Shopping Plaza has been placed on the market with International Expressions of Interest closing 4pm, 14th November 2019. The property features in Bayleys' latest Total Property portfolio magazine.
Cameron Melhuish and James Chan of Bayleys Auckland are marketing the property, which has frontages to Whitford Road and Meadowland Drive and services a significant and affluent residential catchment area that includes Botany Downs, Dannemora, Sommerville, Howick, Cockle Bay and Whitford.
The plaza has a Grade A+ seismic rating and 5,215sqm of lettable retail area spanning an 18,860sqm freehold site with more than 200 customer car parks.
Melhuish says the Meadowlands Shopping Plaza has proved to be a perennially popular community hub since established in the early-1990s and an extensive refurbishment programme eight years ago further enhanced its appeal for tenants and shoppers.
"This plaza bucks the trend of some New Zealand suburban shopping centres in having a strong sense of purpose, long-term tenants and solid patronage," says Melhuish.
"As a shopping and service centre, the plaza has cemented a proven place in the local market as a convenient and reliable shopping destination with more than 20 businesses within the complex."
Although the east Auckland area is well-serviced by retail hubs, Melhuish says Meadowlands Shopping Plaza has consistently attracted both a solid tenant base and a loyal customer following.
"It is not intended to compete with the likes of the nearby Botany Town Centre which is positioned as a retail, lifestyle and leisure offering with civic and community amenities.
"Rather, Meadowlands Shopping Plaza is a service-orientated complex with the essentials for residents in the catchment area, where parking is plentiful and a number of household service-tasks can be completed in one shop/stop."
Countdown, the New Zealand subsidiary of publicly-listed Australian company, Woolworths Limited – which operates a chain of 180 grocery stores nationwide – has anchored the Meadowlands Shopping Plaza for close to 30 years, initially-operating under the Woolworths brand.
With seven years remaining on its Meadowlands' lease, the supermarket's presence in the shopping centre underpins cashflow for investors in the long-term with the property returning a net income of $1,314,267 plus GST per annum.
Meadowlands Pharmacy was also a founding tenant within the plaza and along with the busy AA Centre, helps to support the convenience retail-service focus of the complex.
The balance of the tenants within the plaza include specialty stores across the food and beverage, beauty and health, gifts and stationery, and service sectors.
Bayleys Property Services has managed the Meadowlands Shopping Plaza on behalf of its landlord owners for 10 years, and Melhuish says since January 2018, it's successfully leased or executed rights of renewal for 12 tenancies within the shopping centre.
"This clearly demonstrates the popularity of the plaza among its business tenants and reinforces its reputation as a sought-after retail environment with low vacancy.
"There's currently just 164.1sqm of vacant retail space within the centre which is expected to be leased up in the near future.
"The high level of facility management expertise in place via the current management agreement makes this a truly hands-off, passive investment and allows an owner to comfortably park this in the bottom drawer."
The large, high-profile site has exposure to an average of 25,900 vehicles daily, with dual road frontages and access points.
Melhuish says the flexible and adaptable Business-Local Centre zoning on the flat site adds another level of future value for a new owner.
"While the existing long-term leases mean that any wholesale changes will not be possible in the short-term, this site has potential that could be unlocked over time," he explains.
"The Business-Local Centre zoning designation primarily provides for the local convenience needs of surrounding residential areas, including retail, commercial services, offices, food and beverage, and appropriately-scaled supermarkets.
"Under the Auckland Council unitary planning guidelines, designated local centres are aimed to consolidate fundamentals to provide an attractive place to live, work and visit.
"With changing dynamics in suburban centres Auckland-wide, and growing demand for housing, the expansion of existing local centres will be deemed appropriate if it would provide greater social and economic well-being benefits for the community.
"This local centre zoning typically allows buildings up to four storeys high, with residential use on upper floors permitted."
Melhuish says as an income-producing centre, the plaza will appeal to traditional retail investors, whilst also providing significant holding income/cashflow for developers and land bankers looking at potential future development options for the site.
"A flat site of this size in an area known for having a strong demographic catchment, with residents recorded as having above-average median incomes and where house values underpin confidence in the suburb, makes this a compelling investment opportunity."