The lights are still shining bright on Broadway with Bayleys recently selling three commercial properties on Newmarket’s main street.
Alan Haydock, senior Bayleys broker and leader of the agency’s central Auckland City & Fringe commercial team, says investors are jockeying for positon on Broadway ahead of the completion at opposite ends of the street of the massive expansion of the 277 shopping centre and Mercury NZ’s new head office building.
The three properties to sell at a total value of $25.7million were:
180-182 Broadway: A 2062 sq m fully leased, seven storey office building, with two double stud height retail shops at ground level, on 427 sq m of land sold for $11.5 million at a 6.6% yield through Alan Haydock, Damien Bullick and Graeme Sun, Bayleys Auckland. Route 66 and Tank Juice occupy the retail space with Techtorium NZ leasing three of the five office levels. The sale included 21 carparks on individual unit titles in an adjoining building plus additional income from an advertising signage lease on the southern exterior. (Image above)
136 Broadway: A six-level, 1432 sq m retail and office building with basement carparking, on a 400 sq m site opposite the intersection with Khyber Pass, sold for $7.196 million at a 6.4% yield through Oscar Kuang, James Chan, Matt Lee of Bayleys International Division. Ray White occupies the ground floor on a six-year lease from August 2017 and has signage rights on the building. The floors above are tenanted by various professional firms and the property’s Metropolitan Centre zoning, with a building height allowance of 28.5m, offers future development potential.
252-254 Broadway: A 746 sq m standalone retail building constructed in 1994 on a 362 sq m site sold for $7 million at a 7.41% yield through Ed Donald and David Bayley, Bayleys Auckland. Rodd & Gunn occupies 529 sq m over two levels on a lease until February 2022 with Nike leasing the remaining 271 sq m until August 2022. (Image below)
Like its New York namesake, the premier street in one of Auckland’s oldest suburbs has long been a centre for shopping and entertainment. Newmarket transformed itself from a bustling livestock market into a shopping district in the early 1900s and a previously muddy stretch of Manukau Rd was renamed Broadway to mark the occasion.
A century on and Newmarket has retained its superb investment fundamentals, Alan Haydock says. “The area is strategically located close to the CBD and surrounded by the affluent residential suburbs of Parnell, Remuera and Epsom. It is also close one of Auckland’s oldest and largest parks – the 75-hectare Domain – and now also has easy access to motorways.
“The enduring appeal of Newmarket is evidenced by the prodigious level of investment we’re continuing to see in the suburb,” says Haydock. “It really took off a few years ago when Auckland Council initiated an upgrade of an historically significant area behind the Rialto Centre. Narrow, cluttered lanes and generally unsafe footpaths gradually morphed into attractive and lively streetscapes which pedestrians and cars share and where boutique shops, cafes and restaurants now thrive.
“Tournament has also contributed significantly to reinvigorating a tired industrial corner of Newmarket between York, Kent and Osborne streets without sacrificing its inherent charm, as it has done with the City Works Depot in the CBD.”
Looking forward, Haydock says all eyes are fixed on the huge $790 million redevelopment of 277 Broadway by Scentre Group, the owner of 39 Westfield shopping centres across Australasia.
Due for completion late 2019, the new 277 will cover around four and a half hectares of land towards the southern end of Broadway with approximately 88,000 sq m of lettable space. It will be anchored by David Jones’ first department store in Auckland and also contain a Farmers department store, a Countdown supermarket, state-of-the-art Events Cinema complex and more than 230 specialty stores and eateries.
Haydock says Newmarket is also a popular location for office tenants because of its central location and amenities and taking shape at the northern end of Broadway, past the Olympic Pools, is Mercury NZ’s new head office building. Located at 33 Broadway, the strikingly designed 13,103 sq m 5 Green Star building is being developed by Mansons TCLM and is running two months ahead of its scheduled completion date of late 2018. The property was purchased late last year by Augusta Funds Management Ltd for $141.6 million.
“Thanks to Augusta’s syndication of this building a large number of smaller investors now have a stake in the Newmarket commercial property market,” says Haydock. “This resulted in 1670 individual $50,000 interests being sold by Bayleys Investment Products and Syndications division in the 33 Broadway Trust that now owns the property.
“Given all the activity that’s occurring, it’s no surprise then that we continue to see strong demand and robust prices achieved for commercial property on and around Broadway,” says Haydock, who has sold Newmarket buildings worth close to $40 million in the past six months.
Off Broadway, he also recently sold two-level commercial premises at 96B Carlton Gore Rd, Newmarket for $3.4 million and earlier this year 250 carparks on individual titles in a substantial parking building at 2-4 York St for $16.39 million at a 5.1% yield.
Haydock can’t see the bright lights of Newmarket dimming any time soon. “My regular investors are continuously scanning the area for opportunities. Once the 277 Westfield shopping centre opens, I’m confident we will see foot traffic increase dramatically which will take Broadway to a whole new level.”