NZ Post's property portfolio

Kaitaia NZ Post building at 110 Commerce St.

New Zealand Post is putting a portfolio of five properties up for sale comprising three in Auckland with add-value potential and two provincial properties with long term leasebacks to the state owned enterprise.

The five are for sale individually through Alan Haydock and Cameron Melhuish of Bayleys Auckland with the three Auckland properties in Mt Eden, Royal Oak and Penrose going under the hammer on October 26 as part of Bayleys' latest Total Property auction, unless they sell prior to that date. The other two properties are central post office buildings in Thames and Kaitaia that are for sale by tender, closing on October 26, also unless sold prior.

The highest income generating property is at 371 Dominion Rd, on a 974sq m site on the corner with King Edward St, which is earning $134,362 per annum net plus GST. The Dominion Rd Post Shop and Kiwibank and a copy centre occupy the ground floor of the two-level 581sq m building with an office tenant above.

"Undoubtedly, one of the most attractive attributes of the property is its prominent corner location with sought after frontage to busy Dominion Rd," says Haydock. "It forms part of a popular and vibrant retail strip and is surrounded by the established residential suburbs of Mt Eden, Sandringham and Balmoral.

"While the building is fully leased on three to six-year leases, the car parking area to the rear of the building, which is accessed off King Edward St, has been left vacant - allowing for the immediate redevelopment of this under-utilised land area, subject to obtaining the necessary consents.

"The property has a Business Local Centre zoning under the new unitary plan which provides for the convenience needs of surrounding residential areas and allows buildings up to three storeys incorporating residential on the upper floors."

Thames NZ Post at 517 Pollen St.

In nearby Royal Oak, another high profile corner site property at 794 Manukau Rd is for sale offering net annual rental income of $103,000. The single level 277sq m building on a 581sq m site has a Grade A seismic rating and is occupied by Royal Oak Post Shop & Kiwibank which contributes $58,000 plus GST per annum, and the balance is paid by Royal Oak Liquor Centre. "This is a property with huge development potential given its prime position on the Royal Oak roundabout and its Town Centre zoning with a 27m height overlay," says Melhuish. "The building occupies only around half the site with the balance comprising open air car parks for 10 vehicles which aren't part of the leases. Part of that car parking area is on a separate title which increases the site's development flexibility and opens up on-sale opportunities for this part of the property."

Cameron Melhuish, of Bayleys

The final New Zealand Post property for sale in Auckland is located further south at 39 Station Rd, Penrose. The 413sq m single-level building is fully occupied by a NZ Post/Kiwibank franchisee on a lease until August 2018 with one three-year right of renewal and generates net annual rent of $63,000 plus GST.

"This is an affordable standalone investment property," says Melhuish. "The building has a favourable seismic rating and its 822sq m freehold site with seven on-site carparks, offers add-value potential longer term.

"Station Rd is a popular Penrose address in the heart of this established industrial precinct. It is occupied by well established companies and is close to the Penrose train station."

Melhuish says the two provincial properties are landmark central post office buildings with NZ Post and Kiwibank occupying the entire ground floors of both buildings. He says NZ Post and its subsidiary Kiwibank have reinforced their ongoing commitment to both Thames and Kaitaia by taking new six-year leases on both properties with two three-year rights of renewal.

Penrose NZ Post at 39 Station Rd

The Thames property comprises a 1351sq m building on a 1521sq m site at 517 Pollen St. It is generating annual rental income of $123,150, the bulk of which is provided by NZ Post.

"As with most of these distinctive Government-built central post office buildings, this one is located in a prime main road position on a busy retail strip," says Melhuish. "It's a well presented and maintained character building comprising ground floor retail and offices above."

Six office suites on the upper level ranging from 25sq m to 80sq m are leased on periodic tenancies to professional service providers some of whom have been in occupation since 2013.

Alan Haydock, of Bayleys

"The short term nature of these leases combined with some vacant space on this floor provides an opportunity to increase the rental or convert to some other use such as short term tourist or residential accommodation."

The Kaitaia property encompasses a similarly-styled 996sq m character building located on a 1007sq m site at 110 Commerce St in a high profile main road position near the heart of the central Kaitaia commercial hub amongst other well-known tenants.

NZ Post's ground floor lease will produce initial net annual rental income of $43,000 plus GST.

"The property is anchored by a new long lease to NZ Post while the upstairs offices are offered with vacant possession which provides add value opportunities for investors as well as options for owner occupiers," says Haydock.