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Large suburban mall with development potential placed on the market for sale

Tags: Commercial

The land and buildings housing a major suburban shopping mall, with potential for future large-scale office and residential development, have been placed on the market for sale.


The land and buildings housing a major suburban shopping mall, with potential for future large-scale office and residential development, have been placed on the market for sale.

The property known as Clendon Mall - located at 459 Roscommon Road in the Manukau suburb of Clendon Park - encompasses prominent long-term anchor tenants including The Warehouse and Government agencies Work and Income New Zealand (WINZ) and Counties Manukau District Health Board. These have been in occupation since 1996, 2006 and 2008 respectively.

The high-profile anchor tenants are complemented by a diverse range of specialty retail stores spanning food and beverage, health and beauty and gifts, alongside professional services.

Clendon Mall is about to undergo a $2.3 million development – converting three existing retail premises into a food court, which will feature nine new food tenancies and a 280-seat food hall with new restrooms and disabled facilities. Six of the foodservice tenancies have already been pre-leased in advance of the opening, leaving only three remaining.

Clendon Mall was built in 1982, and over the ensuing decades has undergone a number of extensions. Today it encompasses six buildings with a total of 6,553 square metres of lettable area on a freehold landholding of some 28,225 square metres sustaining 591 car parks.

The property generates a net rental of $1,646,652 plus GST per annum, which would rise to $1,763,652 plus GST with 100 percent occupancy of the new food court.

The property is being jointly marketed for sale by Bayleys Auckland and Bayleys Manukau. Salespeople Mike Houlker, Cameron Melhuish and Ben Bayley said Clendon Mall was a well-established retail precinct which had become a recognised part of the social fabric of South Auckland.

Mr Melhuish said the mall was supported by triple street frontages onto Roscommon and Palmers roads and Robert Ross Place.

“In addition, this well-located site offers significant add-value development potential – supported by its development-intensive Business – Local Centre zoning under Auckland Council’s Unitary Plan. This allows for buildings up to a height of 18 metres with residential permitted on the upper levels,” said Mr Melhuish.

“The vendor has investigated the development potential of the site in keeping with underlying zoning and encumbrances. Identified future options include redevelopment - with more than 25,000 square metres of retail and office space plus 17,000 square metres of new residential accommodation, and nearly 8,500 square metres of car parking.”

Mr Houlker said the combined rental of The Warehouse, WINZ and Counties Manukau District Health Board equated to more than 54 percent of the current rental roll.

Details of the anchor tenancies include:

• The Warehouse - Clendon Mall’s main anchor tenant, occupying 3,400 square metres of floor space, paying net annual rent of $475,811 plus GST. It has just over six years to run on its current lease term
and

• WINZ and Counties Manukau District Health Board occupy a combined floor area of approximately 1,383 square metres, together generating rental income of $415,324 plus GST per annum. The organisations have three years remaining on their current lease.

Other occupiers provide a typical mall tenancy mix. By retail sector, the next four biggest sources of rental income are:

• Food and beverage tenants - occupying some 633 square metres and generating net annual rental of $345,030 plus GST

• General retail - occupying 453 square metres and generating annual net rent of $187,675 plus GST

• Service providers - occupying 528 square metres and generating net annual rental of $80,000 plus GST
and

• Health and beauty outlets, occupying 158 square metres and generating net annual rental of $75,574 plus GST per annum.

“Across Clendon Mall, the weighted average lease expiry by area is just under four and a half years, including the new food court,” said Mr Houlker.

The building at Clendon Mall housing The Warehouse has a seismic rating of 78 percent of new build standards, with two further mall buildings rated at 89 percent and the remaining three structures at 100 percent.

Mr Houlker said retail demand at the property was underpinned by its location at the heart of the fast-growing residential catchment area served by Manurewa Local Board. The area’s population had risen by 16 percent in five years to 95,670 people at the 2018 census.

“Clendon Mall is centrally located to take advantage of the rapid expansion of surrounding residential catchment areas. In particular, it is positioned on a major roundabout that links Roscommon Road and Weymouth Road, as well as two major arterial routes linking Wiri to the north and Manurewa to the east,” said Mr Houlker.

“Adding further to its locational advantages, the venue is flanked by the coastal residential suburbs of Weymouth and Wattle Downs to the south - both of which provide significant sources of customers.”

Mr Bayley said high-profile tenants occupying properties in the immediate vicinity around Clendon Mall - including McDonald’s, Mobil and PAK’nSAVE - added further to the attractiveness of the site, helping to draw high patronage volumes to the location throughout the year.

“Clendon Mall has proven to be a perennially popular retail destination. Retail investment opportunities offering a strong weighted average lease expiry, with such well-known and established anchor tenants are highly sought-after. Factoring in the significant future development opportunities at this site make Clendon Mall a compelling investment and land-banking opportunity,” said Mr Bayley.

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