Sale provides golden opportunity

The refurbished property in Kerikeri boasts a McDonald's restaurant with drive-through, McCafe and children's playground. Photo / Supplied

McDonald's fast food outlets don't come up for sale very often so CB Richard Ellis is expecting keen interest in the sale of a building leased to the restaurant chain in the heart of Kerikeri.

Sitting on the eastern side of Kerikeri Rd in the centre of the Far North town, the property is leased to McDonald's until 2029.

"It isn't often a property tenanted by the international brand comes up for sale as the company prefers to own its outlets but in this case McDonald's is locked in for another 20 years," says CBRE sales broker Dominic Ong, who is selling the fast food outlet with colleague Colin Stewart. Ong says he's never seen a stronger commercial lease.

The fast food premises include a McCafe, drive-through and a separate children's playground covering 235sq m of floor area over a single level on a 1618sq m site. The property has 29 car parks and is partially fenced.

Developed specifically for McDonald's in 1999 by a local investor after a public skirmish to keep the American giant out of the town, the premises have undergone a $500,000 refurbishment within the past year. The premises return $88,000 net a year and the base rent is due to be reviewed in November this year.

The McDonald's site was part of a larger block owned by Kericrest Properties and last month resource consent was granted to subdivide the property, leaving the fast food premises on a site that has a 31m frontage to Kerikeri Rd and a depth of 52m.

Ong says the subdivided site benefits from a right-of-way off Kerikeri Rd running down the southwestern side of the property and across the rear. "This adds considerable value, particularly for the drive-through operation," he says.

General construction of the premises is on a concrete foundation and floor slab. Similar to most McDonald's outlets, the Kerikeri premises have Lockwood solid timber wall construction, coloursteel roofing, and a quality internal fit-out. On the other part of the subdivided site is a "sophisticated and funky" two-storey retail/office building designed by Avery Team Architecture that is home to the town's biggest law practice and a number of well-known retail brands.

Kericrest Properties says it is selling the McDonald's site because it can better use the capital on other projects.

Stewart says the site is one of the best commercial properties to come on to the market and will appeal to any serious investor. "The underlying value is in the lease and that is backed up by a strategic land holding of 1600sq m, which is a large commercial site for Kerikeri. More than 10,000 cars a day pass the property."

Under the Far North District Plan the land is zoned commercial. This is a standard commercial zone in the area allowing for a wide range of office and retail with high site utilisation.

Kerikeri, with a population of about 6000 people, is the largest town in the Bay of Islands and is often described as the "cradle of the nation". As the site of the first permanent mission station and having some of the most historic buildings in the country, the town attracts domestic and international tourists. The first plough was used at Kerikeri and the first grape vines in New Zealand were planted there.

A number of large property projects are on the drawing board, including a new $4 million police station and consent has been granted to Neil Homes for a 179-lot subdivision.

Recently completed developments include the John Butler Centre, an office/retail project at the western end of the town. It has eight to 10 shops and two floors of office space, one occupied by the council.