The Wendy's restaurant building which is for sale at 703 Mt Albert Rd, Royal Oak.
A newly refurbished Royal Oak building designed for and leased long term to a Wendy's restaurant is due to go under the hammer next month.
"This property will appeal to hands off investors with a long term view who are seeking a rock solid passive investment," says Jonathan Lynch of Colliers International who, with colleague Peter Kermode, is marketing 702 Mount Albert Rd for sale by auction at 11 am on March 16, at Colliers' auction rooms at 151 Queen St, unless it sells earlier by negotiation.
The 1923 sq m freehold site is occupied by a purpose built Wendy's building which has a net lettable area of 289 sq m.
Lynch says the strong tenant covenant, strategic location and attractive lease terms are key attributes that property investors are looking for and "will be extremely hard to beat".
"Wendy's is a global fast food restaurant brand with over 6600 restaurants worldwide, and the family owned New Zealand chain has been a long standing tenant on the site.
"In August last year, the company signed a 15 year lease with two rights of renewal of eight years - bringing the lease's final expiry date to July 2046."
The site generates a net passing income of $162,500 plus GST annually with rent reviews every three years linked to market rent.
"Further underpinning the long term viability of this investment property is the building itself. It is a good sized standalone restaurant of solid masonry construction, which was refurbished extensively over the past few months and is now immaculately presented with a new fit out.
"Also, an Initial Evaluation Procedure [IEP] assessment indicates an overall seismic rating of 100 per cent of New Building Standard [NBS] which is an excellent rating and well above the 34 per cent threshold for potentially earthquake-prone buildings."
Kermode says that, in addition to the A-grade tenant and excellent lease structure, the property's location is another significant drawcard.
"The site sits between a Z Energy service station and the Royal Oak Mall - a mid-sized local shopping complex anchored by Pak'nSave which includes over 60 shops, including well-known retailers like ANZ Bank and Whitcoulls.
"It's a high profile position in a sought after location along Mount Albert Rd, with significant exposure to 20,000 vehicles passing daily."
The property comprises a flat site with the Wendy's building to the rear along with it drive-through lane and 30 car parks.
It is currently zoned under the District Plan Isthmus Section as Business 8 while, under the Proposed Auckland Unitary Plan, it is within a Business Town Centre zone.
"Business town centre zones are the primary location for growth of commercial activities and reinforce the role of town centres as focal points for business and community investment," Kermode says.
Royal Oak is an affluent suburb, with quotable value (QV) figures this year showing the median house price to be $1,006,100, Kermode says.
"The large and established surrounding residential catchment is well-positioned to service local businesses such as restaurants and eateries.
"To the south of Royal Oak is the growing suburb of Mangere Bridge, which has experienced significant increases in values lately, while to the north is the affluent suburb of Epsom, and to the northeast is One Tree Hill."
Kermode says Mount Albert Rd is a main arterial route, making it a highly desirable location for businesses seeking high exposure and ease of transport.
"The property is also only metres away from the Royal Oak roundabout, which provides access to Auckland's CBD by way of Manukau Rd along with connections to the northern and southern sections of the State Highway One motorway via Campbell Rd and quick access to Onehunga through Mount Smart Rd.
"The Western Ring Route motorway connection, due for completion in 2017, will dramatically improve access to this area by linking State Highway 20 with State Highway 16 via a six-lane motorway, opening up easier links to west and north Auckland."