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Large corner site with development potential offers buyers annual return of $251,224

Tags: Commercial

The land and buildings currently leased to the Salvation Army store and Cash Converters in West Auckland have been put on the market for sale.

The 1,511sq m freehold corner site at 1 Glendale Road, in Glen Eden, returns $251,224 plus GST from two established tenants on long leases.

Bayleys sales agent Mike Adams says: “The strong lease covenants and high-profile nature of the location should drive interest from investors.”

Mr Adams and Bayleys sales agents Jean-Paul Smit and Alan Haydock are marketing the property for sale by auction on Wednesday April 11 at Bayleys House in Auckland CBD, unless sold prior.

The property, which has a Capital Value of $3,325,000, offers 680sq m of space in a modern building and 33 on-site car parking spaces. Its favourable zoning under the Auckland Unitary Plan, Business - Town Centre, provides potential buyers with future development options - including builds of up to 27 metres in height.

Cash Converters occupies 370sq m of space, on a six-year lease term ending in October 2022, with two six-year right of renewals. The tenancy, which includes 17 car parking spaces, generates $131,986 plus GST in annual net rental income.

The Salvation Army occupies 309sq m, on an initial two-and-a-half-year lease ending in May 2019, with two right of renewals of two and a half years each. The tenancy, which includes 16 car parking spaces, generates $119,237 plus GST in annual net rental income.

Mr Adams says: “Both tenancies are predominantly open plan and enjoy a significant amount of natural light from multiple window frontages. The corner tenancy, taken by the Salvation Army, includes a partitioned rear office/storage space and offers internal access to the car park.”

He adds: “Cash Converters and the Salvation Army are two well established nationwide brands and have a steady business model that is largely immune to any downturns in the economy.

“In addition, the property is positioned a busy corner site that sees 20,000-plus vehicles pass daily and is surrounded by a vibrant mix of businesses.

“Glen Eden is a fast-growing commercial and retail precinct, offering a wide range of amenities, while the corner of Glendale and West Coast roads is close to multiple public transport options, including Glen Eden Train Station.

“This will be of interest to investors who wish to land bank significant holdings around existing transport infrastructure and transport hubs, which have been identified as ripe for intensification and development.

“The Business - Town Centre zone provides for a wide range of activities, including commercial, leisure, residential, tourist, cultural, community and civic services, and provides a focus for commercial activities and growth.”

The Salvation Army operates more than 100 Family Stores across New Zealand. The stores sell donated second-hand goods and are among the most well-known and visible parts of the charity’s work. Store profits go towards supporting the charity's community relief work.

The charity views the stores as a way to help families on tight budgets gain access to quality, second-hand items at affordable prices. They also help with emergency relief for people in urgent need, including anything from furniture and household supplies to clothes.

Cash Converters, which has had a presence in New Zealand since 1993, primarily offers pawnbroking, payday loans and instalment loans. The company's network of stores also trades in second-hand goods - typically jewellery, home entertainment equipment, sports gear and musical instruments.

Mr Adams says: “Analysts generally view pawnbroking as “recession-proof” as many of the sector's customers are judged to be already living in tight financial circumstances.

“Charity shops are viewed in a similar light. Charitable giving in New Zealand, particularly the donation of second-hand goods to charity shops, is high. Figures from 2016 show that Kiwi charitable donations made up 0.79 per cent of the country's gross domestic product, and that Kiwi volunteers contribute around 270 million hours to the community.”

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