A substantial slice of Broadway with a massive 63 metres of frontage to Newmarket’s premier retail strip is up for sale.
The offering encompasses just over 2000 sq m of retail buildings plus basement parking, located on two lots of leasehold land totalling 1538 sq m at 312-316 and 318-330 Broadway. It is occupied by three high profile anchor tenants: one of New Zealand’s biggest banks, the BNZ, and multinational apparel retailers Bivouac and Adidas which has recently renewed its lease.
The property is also opposite 277 Broadway where the Westfield Newmarket shopping centre is currently undergoing a $790 million redevelopment and expansion.
One of the feature listings in Bayleys’ latest Total Property portfolio, the property is for sale by tender closing at 4pm, September 14 unless sold prior. Marketing agent Bill Lissington of Bayleys central Auckland investment team says it will offer its next owner net annual rental income, after the ground rent has been paid, of $881,398 increasing to $951,900 in December 2019.
“The purchaser will also acquire a big chunk of central Newmarket’s retail and commercial hub which is likely to become even more sought after by tenants as a location once the new, reinvigorated Westfield complex opens its doors.”
The adjoining rectangular shaped buildings for sale have full height glass frontage to Broadway and feature high-stud retail space along with mezzanine offices. A basement carpark has 54 single and stacked spaces, most of which are leased to the BNZ. Lissington says the property’s only vacancy is one parking space with potential to generate additional annual rental income of around $2,700.
The largest tenant is the BNZ which has been there since 2006 and occupies the bulk of 318-330 Broadway which has 32.5m of street frontage. BNZ leases 1182 sq m encompassing 698 sq m of ground floor space used for its retail banking operations, 407 sq m of mezzanine office accommodation and a 58 sq m basement storage area.
The bank’s current 14-year lease runs until July 2020 with three seven-year rights of renewal which if exercised would take its final expiry out until 2041.
Also leasing 109 sq m of ground floor space at 318-330 Broadway is the Co-Operative Bank Ltd on a six-year term until August 2019.
The 736 sq m building at 312-316 Broadway has 30.5m of street frontage. “Adidas New Zealand which has been in occupation since 2006 has agreed to a new lease, subject to board approval, for a further five years with no rights of renewal,” says Lissington. “This takes its tenure through to July 2023 and is a vote of confidence in the location by one of the world’s biggest apparel retailers and underlies the fact these properties are proven performers.”
Adidas occupies 322.5 sq m of ground floor space plus a 72.5 sq m mezzanine area. The other occupant in this building is another global retailer Bivouac which specialises in outdoor recreation clothing and equipment. Its lease over 341 sq m of the ground floor runs until August of next year with one six-year right of renewal.
Lissington says the Bivouac, Adidas and Co-operative Bank leases have fixed annual rental increases based on the Consumer Price Index plus one percent while the BNZ lease has market related reviews. “The Bivouac lease also has a review to market in August next year should it decide to exercise its right of renewal. This provides the prospect of an upward income adjustment to bring it more into line with market rentals for surrounding properties.”
Lissington says the property for sale is in a very tightly held retail block with the ASB Bank and Westpac being neighbours. Across the road, work is well underway on the rebuilding and expansion of Westfield Newmarket.
It encompasses a redevelopment of the existing 277 Broadway building which will be anchored by David Jones’ first Auckland department store and a new Countdown supermarket and is directly opposite the property for sale. This building will be linked by an air bridge over Mortimer Pass with a substantial new building being constructed at 309 Broadway.
The project is being undertaken by Scentre Group, the owner of 39 Westfield shopping centres across Australasia, and is scheduled for completion in stages next year. It will cover around four and a half hectares of land with approximately 88,000 sq m of lettable space plus 2770 parking spaces.
It will also encompass an Events Cinema complex and have more than 230 specialty stores and eateries. A feature will be a roof top dining precinct with stunning views of Auckland.
“This will be our best centre in New Zealand and on a par with our best in Australia,” Scentre’s Chief Operating Officer Greg Miles said at the announcement of the project which is one of the biggest retail developments currently being undertaken in Australasia.