Plenty of space for new tenants

Rayden Mitre 10 at 39 Mt Wellington Highway will soon be vacated leaving space to lease. Photo / Supplied

The family business of Rayden Mitre 10 Mt Wellington is moving from 39 Mt Wellington Highway to a new 10,000sq m Mitre 10 Mega store on Lunn Ave, Mt Wellington, leaving room for a new retailer or a number of brands to occupy its large-format premises.

Retailer and property owner Dennis Yee will open the family's Lunn Ave Mitre 10 Mega store during October.

As a result, CB Richard Ellis South Auckland, in conjunction with Match Realty, is marketing the soon-to-be vacated 5000sq m Mitre 10 store on Mt Wellington Highway for lease, with large-format tenancies ranging from 1500sq m to 800sq m at the front.

CBRE's associate director Dave Arlidge said there was no room on the site to expand the existing Mitre 10 outlet into a standalone Mega store so Yee decided to move to Lunn Ave because this is still within the catchment area of 65,000 households that form his customer base.

Arlidge says the existing store is a blank canvas and can be split depending on tenant's requirements. "The opportunity here is the prized retail frontage on Mt Wellington Highway."

As the site is zoned for bulk retail, Arlidge says one big national chain retailing furniture, hardware, fashion, appliances, electronics, or sports goods could lease the entire store or smaller tenancies could be created.

Match Realty leasing consultant Alan McArdle says there has been interest from bulk retail tenants.

"It is a good location for national brands. The growing catchment helped Mitre 10 and other national retailers develop successful outlets over the past decade. Yee is now moving to a store double the size with a much bigger product range."

Latest retail trade figures show Auckland continues to outperform all other major centres. Retail sales for the year to April increased by $697 million (3.4 per cent) compared with the same time last year.

Commentators say a recovering labour market will help bolster household spending over the rest of this year.

Rent for the reconfigured Mitre 10 premises is expected to be in the range of $180/sq m to $190/sq m on the street frontage and an average of $120/sq m over the whole building.

"It depends on how much conversion work has to be done," says Arlidge.

CBRE's research shows that bulk retail rents have stabilised after falling last year to 2005 rates. Researcher Kevin Anthony says net effective rents are now sitting at an unchanged $221/sq m.

"Rental growth will remain subdued in the second half of this year and firm by the first half of next year in conjunction with improving economic conditions."

He says demand for bulk retail premises is growing. "At the end of last year, vacancies sat at 7656sq m, 2.1 per cent of total stock, down from a peak of 9789sq m, 2.6 per cent of total stock, in the middle of last year."

The Mitre 10 store is one of the biggest and established bulk retail centre locations in South Auckland. Neighbouring businesses include Harvey Norman, Briscoes, Rebel Sport, Warehouse Stationery, Furniture City, next door, and Big Save Furniture. A Bunnings Warehouse is going up on the site next door. Further down the road, ground work has started on Redwood Group's 15,000sq m Apex retail development opposite Sylvia Park.

"A good shopping area has developed in the precinct and it has become a destination for people not only from the immediate suburbs of Tamaki, Panmure, Penrose and Ellerslie but shoppers from the city, Parnell and Newmarket," says McArdle.

The block has an interesting history. It was Fisher & Paykel's headquarters and manufacturing base before the iconic New Zealand company bought bare farmland at East Tamaki to develop its own campus.

After Fisher & Paykel left, the property became premises for the Army, workshop equipment company GDC and then industrial storage sheds, which were refurbished and subdivided into the existing retail tenancies. Consent was recently granted for new industrial units at the rear of an adjoining property.

"The location has been good for Mitre 10 and that is why Yee is committed to staying in the prized catchment area," says Arlidge.

"A new roading network will further enhance the area as a retail destination. It will create a direct route from the eastern side of Mt Wellington through to St Johns and then to the Southern Motorway."

Named by the colonists after the Duke of Wellington, Mt Wellington was known for decades as a working class suburb - poor houses at one end and a quarry and dirty, extractive industries and scruffy factories at the other.

A massive change has taken place. The quarry has given way to a master planned housing project which will eventually have 2900 homes, catering for more than 6500 people - bigger than the average New Zealand country town, while the quarry edge has become a retail centre, part of 11ha that will be developed along Lunn Ave.

"Anybody going to Sylvia Park passes Mitre 10's door and projections from Statistics New Zealand show the number of people living in Mt Wellington and its surrounding suburbs will grow 10-20 per cent over the next decade.

"This growth will provide the Mitre 10 site with a strong customer base for the future."