Paeroa's only large format supermarket with a long lease to Countdown and occupying a prominent corner site on the main retail strip of the Coromandel town is on the market itself.
"This is an exceptional investment quality commercial property asset with a strong tenant covenant and long term future," says Cam Paterson, commercial broker with Barfoot & Thompson Commercial who is selling the property at 21-27 Belmont Rd, Paeroa, by tender closing at 4 pm on Wednesday, August 19 unless it sells beforehand by negotiation.
Paterson says the Countdown occupies a 3793 sq m freehold site and has a total lettable area of 1955 sq m comprising a 1348 sq m main trading area, 183 sq m of mezzanine offices and amenities, 424 sq m of preparation and storage space and comes with 65 on site car parks.
It was constructed as a Supervalue supermarket in 1965 and then became a Woolworths' supermarket before being rebranded in 2010 and finished in the standard Countdown style. The building has undergone several alterations from the original structure including the amalgamation of two adjoining buildings with the initial complex to increase its overall size.
The property, earning annual net income of $310,829 plus GST, is leased to Countdown until June 30, 2020, but has a final expiry date of 2050 if all five six-year rights of renewal are exercised.
"The current rental is $159 per square metre which we expect to increase to around $180 per square metre of $350,000 annually at the next rent review to market rate on July 1, 2017," Paterson says. The tenant pays operating expenses, rates, insurance, repairs and maintenance.
"The supermarket services the local farming community and has prominent exposure with broad frontages to three streets," Paterson says.
"The main retail area has seven checkouts and is well presented with vinyl flooring over a concrete floor, plasterboard lining and a suspended ceiling with recessed fluorescent lighting units.
"The mezzanine office and amenity areas also have vinyl floor coverings but over timber
mid-floor with plasterboard ceilings and recessed lighting. The balance of the site consists of a street levelfully sealed car park for 65 vehicles, accessed via William Street.
"The vendor has received an engineering assessment of the property showing it to be 48 per cent of New Building Standard [NBS]. This report indicates costs and works of about $160,000 would be required to improve the building to 100 per cent NBS and could be completed with minimal tenant interruption," Paterson says.
The property has a strategic position on the corner of William Street from which it is accessed and to Belmont Road which doubles as State Highway 2 offering the best retail exposure to traffic in the town. "It has over 185 square metres of unobstructed street profile."
The rear of the property is bordered by Marshall Street.
Paterson says the only local competition to the Countdown comes by way of a smaller Foursquare supermarket to the south.
Cam Paterson of Barfoot & Thompson.
"Increasing building costs are a barrier to the entry of any other competitors and make the reality of the development of other supermarket sites very unlikely which protects the future of this property." Surrounding businesses include a mixture of cafes, motor vehicle sales, liquor outlets and professional and local authority offices.
Paeroa sits at the foot of the Coromandel Peninsula at the intersection of State Highway 2 and SH26 which carry traffic to and from Auckland, Waihi, Tauranga, Hamilton, Matamata, Morrinsville and the Coromandel Peninsula.
"The catchment, site configuration and car park area all ensure the property's suitability for sound alternative uses well into the future," Paterson says.
The intention of the Town Centre zone, in which the property is located, is defined by the Hauraki District Council Operative District Plan (1997) as ensuring the development of business, retail and community activities help to maintain the amenity of adjoining areas.
Permitted activities within the Town Centre zone include retail, business, administrative and community activities. Several discretionary activities are also listed in the District Plan including service stations, trade depots, farm machinery sales and others.
The zone has a maximum height limit of 10 metres and no yard controls except where a site
adjoins a residential or reserve zone.
"The location, excellent lease structure and the A-grade tenant makes this a great investment opportunity," Paterson.
Sales method: Tender closing 4 pm Wednesday, August 19
Features:
• Long lease with potential final expiry in 2050. • A-grade nationally branded tenant. • Strategic corner freehold site on State Highway 2. • Earns annual net income of $310,829 plus GST. • Rent review to market on July 1, 2017.
