Shops leave investors spoilt for choice

The Silverdale block has been owned by one family since 1981. Photo / Supplied

Two sets of shops and a single menswear store in Orewa and Silverdale are to be auctioned for the first time this month.

In Orewa, the resort suburb's first high-rise building, the Nautilus, has a total of nine shops which had been kept until now in the investment portfolio of the building's developer, Cornerstone Group.

These Tamariki Ave shops are now for sale through Richard White, of Bayleys Auckland office, and Janne Adams, of Bayleys Orewa, and will go under the hammer on September 23 as part of Bayleys' Total Property portfolio auction.

Six of the nine shops are tenanted on leases of four to six years at rentals ranging from $32,000 to $55,000, with annual CPI rental increases plus a two-year market review.

Tenants include the NZ Racing Board (TAB), Bay Audiology, Chocolates for Breakfast, a bar, a Japanese restaurant and a hair salon.

At present the shops produce total net rental income of $212,289 but this would climb substantially once the remainder are let, White says.

He says it is likely the shops will be offered for sale as one lot initially and then be auctioned individually if they don't sell in their entirety.

White says there is a growing demand for retail space in Orewa because of the substantial residential growth that is occurring as the result of the extension of the motorway system, Fulton Hogan's huge residential subdivision, rest home development and the opening of new schools.

Also being auctioned on the same day is the Sussex Menswear store in Moana Ave, Orewa, which is being put up for sale by the business owner, who is retiring and offering the unit with vacant possession or with a guaranteed rental for six months until the new owner can find another tenant.

Mustan Bagasra, of Bayleys Orewa, says the vendor is also prepared to sell both the business and the shop, which has a net lettable area of around 100 sq m, if someone wanted to buy it as a freehold going concern.

"It's in a very high profile location among established businesses like cafes, bars and restaurants and a Lotto and video outlet with good foot traffic," he says.

In Silverdale, just south of Orewa, a block of eight shops is being auctioned by vendors who are also retiring, Bagasra says.

The shops at 20 Silverdale St are owned by well-known local identities Purshottam and Ratna Krishnan, who built the 595 sq m complex themselves over a 28-year-period. The shops are located on a site of just over 1000 sq m which has 15 carparks.

Bagasra says they have been a well-established feature in Silverdale's main street over the past 20 years, with the bus interchange terminal at its doorstep.

They are producing net annual rental income of over $103,000.

While the property is currently on one freehold title, there would be potential to strata title each unit and sell them individually at some stage, he adds.

"This is an affordable split risk investment with the scope to redevelop and enhance the value of the property. The area is continuing to grow rapidly and there is even a new secondary school in the pipeline," Bagasra says.

Krishnan is a former Rotary Club president and was employed by the Rodney Council for many years.

The Krishnans bought the land in 1981 when there were very few houses in the area and it contained an old building that was used by a potter who lived, worked and sold his wares from the building.

They subsequently built the first three front shops in the early 1980s and in 1992 demolished the original building to make way for more development.

In 1994, they built the last four shops at the rear of the site. At one time the couple used one of their shops as an Indian takeaway to raise funds to help families in Fiji affected by the first coup.