A substantial retail property for sale in fast-growing Henderson offers an add-value investment opportunity plus future redevelopment potential.
Colliers International is selling 20-30 Sel Peacock Drive by deadline private treaty, with offers closing September 14, unless sold earlier.
The 9640sq m freehold property is being marketed by Colliers' West Auckland-based Site Sales team, which specialises in residential redevelopment sites, and its Capital Markets team.
Richard Kirke, international sales director at Colliers International, says it is an outstanding passive investment with plenty of add-value potential.
"This split-risk investment offers a net passing income of some $1,250,000 a year from seven tenancies, including three national anchors on long-term leases," he says.
"Investors can immediately add value by re-letting the property's vacant 421sq m retail and office tenancy, potentially boosting rental income by some $84,000 a year.
"There is also a near-term opportunity to redevelop the site's 3024sq m carpark, with planning rules allowing for residential development up to 22.5m in height, potentially with ground floor retail.
"In the longer term, the site's generous zoning allows for more intensive residential development, with a concept design showing it could be developed into 524 apartments."
Colliers' Site Sales Director Josh Coburn says West Auckland is the city's fastest growing area, with an estimated 30,000 new homes needed in the next three decades.
"This property is ideally positioned to benefit from that growth, being only a short walking distance from central Henderson, which has been identified as a key growth area," he says.
"Henderson has already seen substantial development in the last decade, and is now a thriving retail, commercial and industrial hub.
"Metlifecare's Waitakere Gardens Village development, opposite the site, and various residential and infrastructure proposals for Henderson Valley Rd point to a positive future."
Coburn says the property is on three titles across two zones - Metropolitan Centre and Terrace Housing and Apartment Building.
"These two zones, created under the Auckland Unitary Plan, provide for greater density within metropolitan areas like Henderson," he says.
"Savvy investors will see the immediate potential of the land zoned for Terrace Housing and Apartment Building, which is currently used as for carparking.
"The land would be ideal for a terraced apartment development, potentially with retail on the ground floor."
Coburn says Terrace Housing and Apartment Building zoning usually allows for development up to 16m, but the property benefits from a height variation control permitting development up to 22.5m.
Colliers' Capital Markets Director John Green says the property was constructed in the late 1980s as a purpose-built Mitre 10 showroom and warehouse.
"It has since been upgraded and redeveloped into a multi-tenanted bulk retail centre," he says.
Green says the property has a net lettable area of 9700sq m split across seven tenancies. It has an 182m street frontage to Sel Peacock Drive, as well as 139 off-street carparks.
"The property is anchored by national tenants Storage King, the Mad Butcher and the Ministry of Social Development," Green says.
"The remaining tenants include a bakery, laundromat, Universal Church and a vacant office tenancy.
"All seven tenancies offer a weighted average lease term of 5.98 years, with Storage King having a substantial 10-year lease.
"Our analysis indicates investors can anticipate a strong future upside at review time."
Colliers' Site Sales broker Craig Smith says the property is well positioned on the eastern side of Sel Peacock Drive.
"It is within easy walking distance of the Henderson town centre and the newly rebranded WestCity Waitakere shopping centre.
Only 17km west of Auckland's CBD, the property has good access to the Northwestern Motorway (SH16).
"Planned upgrades to the motorway include a proposed new busway. It also offers easy access to the Western Ring Route and the recently opened Waterview Tunnel, which links to the airport and SH1 via SH20."
Smith says the site offers long-term potential, with the Metropolitan Centre zoned land allowing for development up to 72.5m.
"This zoning makes the development of high-rise residential apartments possible," he says.
"The vendors have prepared a development concept that broadly complies with planning controls, giving an indication of the property's potential.
"Their concept design envisions a 524-dwelling apartment and terraced housing development with a ground floor area of 40,612sq m.
"The development would include 608sq m of retail and 425 car on-site carparks. Despite its scale, the complex would cover only 4300sq m, or 45 per cent of the site."
Colliers' Capital Markets Director Blair Peterken says the building has retail tenancies on the ground floor and an extensive basement area currently used as a storage facility.
"The basement area has two vehicle access points, a reception and general office area, a small amenity block and a mezzanine office."
Peterken says the building is constructed of reinforced concrete foundations and floors, a combination of concrete block and galvanised metal cladding, aluminium joinery, and long-run iron roofing.
The office and retail tenancies have full-height glazing.
The interiors mostly have Gibraltar board internal lining, suspended ceilings and fluorescent lighting.
Peterken says anchor tenant Storage King, which occupies about 6618sq m, is the largest self-storage organisation in Australasia with locations throughout Australia and New Zealand.
The Mad Butcher, which occupies about 295sq m, was established as a volume business in 1971 by Sir Peter Leitch.
"The brand grew rapidly through the 1980 and 1990s, with the first franchise outlet opening in 1998. The franchise rights are currently owned by Veritas Investments."
The Ministry of Social Development's call centre occupies about 1565sq m of office space.
"Government tenants like this are highly sought for their stability."