The biggest commercial real estate sell-down in Gisborne for decades – featuring the city’s largest suburban retail shopping hub – has been publicly announced.
Kaiti Mall at 498 – 508 Wainui Road on the north-eastern edge of Gisborne’s central business district, features 3680 square metres of shops sitting on a 12,410 square metre block of freehold land.
The mall is famous throughout Gisborne for its rows of tall palm trees and availability of parking. Wainui Road – also known as State Highway 35 – is the main route north out of the city, and links the north-eastern suburbs of Tamarau, and Wainui.
Kaiti Mall is occupied by 12 individual retailers, businesses, Government and commercial tenants – and has been mooted for a ‘make-over’ to attract more commercial activity to the location and broaden the customer appeal for operators on site.
Featuring dual entry/exit points off Wainui Road, U-shaped Kaiti Mall has public parking for more than 100 vehicles – with even more staff car parking at their rear of the retail premises. The land is held in eight titles.
The property is being marketed for sale by tender through Bayleys Gisborne, with tenders closing at 4pm on June 21. Salesperson Colin McNab said Kaiti Mall was very much a ‘neighbourhood’-focused retail destination whose tenancies reflected both its geographic and socio-economic location.
“This is certainly the biggest single retail and commercial sell-down anyone in the office can remember for decades. In fact, you’d have to go back to the turn of the last century to find anything of this size and scale coming onto the market,” he said.
“Built in the 1960s, Kaiti Mall has solid bones from a construction perspective, but would certainly benefit from a phased refurbishment and modernisation make-over to brighten up its general appearance.
“The mall’s tenancy mix reflects the surrounding residential nature of this part of town. There’s the baker, the grocer, the bottle shop and the local bar as ‘cornerstone’ operators relying on a very local clientele.
“However, the mall’s real potential lies in bringing the premises into the 21st century - not only from a physical infrastructure perspective, but also re-invigorating its public persona by making it more ‘customer-friendly’.”
Among the tenancy schedule at Kaiti Mall are:
• Liquid Self-Service Laundromat on a lease currently running through until 2019, with five further two-year rights of renewal
• Kaiti Mall Fish Shop currently on a lease running through until next year, with three further three-year rights of renewal
• Kaiti TAB
• Kaiti Mall Pharmacy currently on a lease running through to 2021 with a further three-year right of renewal
• Work and Income New Zealand, which occupies two adjoining premises
• Kaiti Bakery currently on a lease running through to next year, with a further five-year right of renewal
• Kaiti Mall Super Value supermarket – one of 40 nationwide grocery stores operating under this franchise moniker
• Shiralee Dairy currently on a lease running through to next year with two further three-year rights of renewal
• The New Zealand police on a lease currently running through until 2021
• Red Door Liquor Shop currently on a lease running through until 2020 with two further three-year rights of renewal.
Additionally, there are commercial leasing agreements for an ANZ Bank ‘hole in the wall’ money dispensing machines and a 2 Degrees Mobile cellphone tower. Combined, the 12 current tenancies generate a net annual rental income of $339,344 plus GST.
Mr McNab said that while Kaiti Mall delivered one of the biggest retail/commercial rent rolls in Gisborne, there were several avenues to grow revenues even further.
“Most obviously, there are three vacant tenancies in the hub. Tenanting those will there immediately increase rental revenues,” he said.
The three empty units measure 368 square metres, 312 square metres, and 56 square metres each. Mr McNab said that broadly based on existing lease terms for other tenants within the mall, the three empty units could expect to earn an additional $40,000 - $50,000 per annum when fully occupied.
“Secondly, with careful placement, the grass verge area bordering the car park and Wainui Road could accommodate a small number of ‘pop up’ food and beverage outlets such as coffee carts and caravan-style fast food operators throughout the day.
“With plenty of vehicular access, these could almost operate on a ‘drive-through’ basis.
“Expanding this theme of increasing the diversity in food and beverage options further, there has been talk of Gisborne establishing a night market attraction within the car park on a fortnightly or monthly basis – with site holders paying one-off rental fees or subletting the night market concept to head-leasee to run.
“These food markets are hugely popular and incredibly successful in the bigger cities where they bring together a global fusion of cuisines – so you can try everything from Chinese, Thai, Indian, Mexican or Italian styles, through to boutique menu options such as barbecued ribs, hangi pork, Cajun chicken, or Hungarian fried bread.
“Gisborne is pretty quiet on a Sunday evening, so imagine the vibrancy a night market would bring to the city – not only for a core customer base of locals, but also tourists.
“Additionally, there is also the potential, subject to council consent, to install a considerable length of billboard advertising along Wainui Road street frontage – motivated by the relatively high traffic counts travelling in both directions along route 35.”
Mr McNab expected the landmark property would be bought as a passive investment, “although with three vacant premises, there is the potential that an owner/occupier could take up residency.”
“The broad tenancy mix of Kaiti Mall ensures a very spread-risk investment – with everything from small privately-owned businesses and two Government departments, through to a stand-alone supermarket.
For stock delivery and staff entry, the mall’s retail businesses are accessed from either Craig Road or the cul-de-sac of Jackson Street. Each tenancy has their own individual staff amenities and bathroom facilities.
Mr McNab said that while the terraced Kaiti Mall was built in a 1970s configuration, the philosophy behind a ‘one stop’ suburban shopping location had been reinvigorated over the past 10 years through a change in societal dynamics.
“As more and more families become reliant on two working parents, there is often less time for such fundamental household chores such as shopping for dinner. As a result, the suburban shopping hub, such as the Kaiti Mall, has once again become the social norm – enabling urban dwellers to pull in to their local complex, get a ready made meal or ingredients for that night’s dinner, a bottle of wine, and the dry cleaning all in one visit,” Mr McNab said.
According to the 2013 Census, the Gisborne district is home to some 43,653 people – with 32,690 living in the city. Gisborne’s population is forecast to increase by 2.11 percent between 2011 and 2025 .