Three shop blocks offer rare chance

This four-unit block of shops at Melrose Rd in Mt Roskill produces a net annual rental income of $70,800. Photo / Supplied

Three suburban retail properties featured in Bayleys' latest Total Property Winter portfolio come within a sought-after price bracket in an investment category that comes up for sale only very occasionally.

Tony Chaudhary, of Bayleys Manukau, who is marketing two of the properties, one in Beachlands and the other in Mt Roskill, says blocks of suburban shops in busy locations are popular with tenants which are usually family businesses and often quite profitable.

"Very few people who own a superette or Lotto shop or something like that will walk away from their business. If they want to get out of the business they will usually on-sell it, so suburban shops in good locations are rarely vacant," he says.

Chaudhary is marketing a four-unit block in Melrose Rd, Mt Roskill with Henry Thompson, of Bayleys Auckland, and a two-tenant building with a superette and liquor store in Third View Ave, Beachlands, with Ben Jones of Bayleys Manukau.

Further north, Damian Stephen and Caleb Belling, of Bayleys North Shore Commercial, are marketing a five-unit block, which includes a near-new residential apartment, on a 688sq m site on East Coast Rd in Milford.

Stephen says one of the tenants in the Milford property, known as the Crown Hill shops, has been there for more than 20 years, and as far as he knows there has rarely, if ever, been a vacant shop for longer than it takes for a tenant changeover. The ground floor retail units are occupied by a takeaway outlet, superette, florist and baker, which have all exercised the second of various rights of renewal.

The four shops are producing annual net rental income of $75,000 and the apartment, which is occupied by the owner, has a potential market rental of $23,000 per annum.

Stephen says the two-bedroom apartment at the rear of the site offers sweeping views out to Rangitoto and also has an open-plan living area, an office or study and a garage. It was completed 18 months ago.

The 1960s-built 260sq m Mt Roskill block of shops is producing net annual rental income of $70,800 and comprises a dairy and Lotto shop, an Indian grocery, a liquor shop and a financial services company. The shops are on 665sq m of land in two titles.

Chaudhary says it is an excellent investment for its price bracket because the owner's risk is spread across four tenancies and the property has had few vacancies.

It will be auctioned on September 23 along with the modern, standalone 330sq m Beachlands building which is located in Third View Ave and is producing net annual income of $49,000 from two tenants, Karishma Food Market and Manukau City Council.

Built in the 1990s in the only commercial strip in Beachlands, Chaudhary says there is resource consent in place which could be exercised to build an additional retail unit.

The property is zoned Business Activity 1 and the site comes with 150sq m of vacant land adjoining it.

The resource consent is for an additional 126sq m of ground floor retail plus 114sq m of second floor office space.

The property is for sale by deadline private treaty closing September 23.