A freehold retail investment property in the heart of Remuera shopping village is for sale, with a long-standing tenant in occupation.
The two-level character building occupied by Bilkey & Co Fine Jewellery at 407 Remuera Rd is being marketed for auction at 11am on August 7 at 151 Queen St by John Davies and Charlie Oscroft of Colliers International.
The property, on a 184sq m site, is producing net annual rental income of $75,000 from a lease to Bilkey & Co for a five-year term dating from September 2010. Rights of renewal give the tenant the option to extend to June 2021 and the lease is backed by a personal guarantee.
"Bilkey & Co has operated from the premises since 1992," Davies says. "The business is well established at this location and is a family-run jeweller stocking a range of high-end jewellery as well as fine china and crystalware."
The property represents the type of well-located, quality stock which is in demand at the moment, he says.
"Investment properties with good fundamentals are very popular right now, given the low borrowing rates available and the yields provided on commercial property compared with other asset classes."
Oscroft says retail property priced under $2 million is a "sweet spot" for investors, with retail the most popular commercial property investment category.
"Retail properties have remained popular with investors even during the market downturn, owing to their easily understood fundamentals, and the market is now showing solid improvement, especially in prime locations. With the low borrowing rates that are available, we are seeing many first-time buyers enter the commercial property investment market.
"We expect individual investors, as well as those looking to establish a foothold in the retail property market or perhaps diversify out of the residential market, to be particularly interested in this property," Oscroft says.
The building comprises ground floor retail space and first floor office and storage areas and has a total floor area of 146sq m. It backs on to the Village Green shopping and restaurant precinct, which was recently upgraded. Two off-street car parks are also provided behind the building.
Davies says the building occupies a prime position in the heart of the Remuera shopping precinct, making it a high-profile investment on a main road in one of Auckland's most affluent suburbs.
"Well leased buildings in the Remuera shopping strip are tightly held [and] have a 'trophy' value, in that their high-profile frontages are easily visible to people driving past or shopping in the area. This value is also enhanced by the quality of the other retail occupiers in the area, which are well-established and serve a wealthy local catchment.
"There is very little vacancy on the Remuera Rd retail strip. Most of the shops along Remuera Rd have been continuously occupied for a long time and they are prized investments."
The property forms part of a character row and is next to a large Browns women's fashion store in a well-established location for retailers.
Davies says the village provides an ideal retail mix aimed at well-heeled locals. "Remuera Rd features a strong focus on upscale gift and homeware stores as well as fashion boutiques."
Compared with other shopping areas, such as Newmarket, there are fewer large national and regional brands, and more local retailers which give the village an individual flavour which local residents enjoy."