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More investment opportunities in brand new retail complex

Tags: Auckland Commercial Northland

A further five outlets are for sale in The Grange retail convenience centre located on one of busiest stretches of State Highway One on the outskirts of Warkworth.

A further five outlets are for sale in The Grange retail convenience centre located on one of busiest stretches of State Highway One on the outskirts of Warkworth.

The finishing touches are being put on the brand new commercial complex located at 67 Auckland Road (SH1).The majority of the businesses who have committed to long term leases within the centre, which has a substantial food and beverage component, are now up and running. The development has met with a strong response from the market with the majority of its 31 tenancies leased or purchased by owner occupiers ahead of final completion.

There has also been a 100 percent clearance on a range of tenanted units offered for sale to investors on an individual titled basis in a number of stages. Yields on these sales have ranged from 5.2% to 6.5% at prices between $475,000 and $3,350,000.

James Chan, sales director for Bayleys’ International Division, says investors have been attracted by The Grange’s very strong location, with its SH1 positioning providing high profile exposure to approximately 6.35 million cars a year which pass its entranceway.

“Other draw cards for investors are the brand new nature of the premises and their long leases, most of which also have built in annual rental growth,” he says.

A third tranche of units has now been released for sale. These include four food outlets and a large variety store situated next to a BP service station located at the entrance to The Grange.  

Leases range from five to 10 years and annual net rentals from $30,000 to $92,500, putting them within smaller investors’ budgets, says Mr Chan. All but one of the leases have fixed annual rental increases based on the Consumer Price Index (CPI) plus 1%.

James Chan is marketing the five units with Matt Lee and Quinn Ngo of Bayleys International Division in conjunction with Jan Hutcheson, Bayleys Warkworth. They will be auctioned for sale individually at Bayleys central Auckland auction rooms  on November 30.

The largest offering for auction is the 374 sq m Cross Gate variety store located in a prime position next to the BP Service Station, near the centre’s entrance. It is part of the Real Mean Store chain which operates in South Auckland. The store specialises in a wide range of products, sold at a low cost. Product lines range from cleaning products, toys and party products to pet accessories and giftware. Lee says because of The Grange’s position on a major tourist highway, there are plans to add to add items with appeal to tourists such as souvenirs, sheepskin products and soaps.

The store has a six year lease, with two four-year rights of renewal, and is generating net annual rental income of $86,700 with fixed annual rental increases based on the CPI plus 1%.

Green Bay Fruit and Vegetables has established its fourth store at The Grange, with others in Silverdale, Kelston and Albany opened in the last two years. “The owner of the business has established many green grocery stores since arriving in New Zealand more than 20 years ago, a large proportion of which are now owned and operated by other family members,” says Lee.

Green Bay Fruit and Vegetables stores specialise in fresh fruit and vegetables, frozen Asian products and general grocery items. The company has taken a new eight year lease with two four-year rights of renewal over the 297 sq m unit that is for sale at The Grange. That lease is producing initial annual net rental income of $92,500 with annual increases based on the CPI.

Also for auction is a 128 sq m unit occupied by Cizzlin, a fusion grill restaurant which specialises in Mongolian style dine-in or takeaway food. It has sprung from the well-known Gengy’s stable of restaurants, the first of which was established by Cizzlin’s owner over 14 years and has expanded to nine restaurants, says Jan Hucheson. 

“Cizzlin is responding to the demands of travelling customers who enjoy the Mongolian style taste experience but require a quick turnaround.  Diners can design their own meal by choosing from a meat selection, noodles or rice plus a selection of vegetables.”

Cizzlin’s lease runs for eight years with two four-year rights of renewal and is generating net annual rental income of $65,000.

The two other units are smaller offerings which are each producing net annual rental of around $30,000. One is a 77 sq m bakery established by a husband and wife team who have been operating their Snells Beach bakery since 2011 and has a five year lease with one eight-year right of renewal.

The other is a 59 sq m fish and chip shop owned and operated on a 10-year lease by a Warkworth couple, one of whom was previously head chef at the Puhoi cheese café.

The Grange and has a mix of national and local businesses and is anchored by McDonald’s and the BP Station. Hutcheson says it is sourcing customers from passing motorists and the growing population of Warkworth as well as the surrounding coastal catchment area of permanent and holiday residences.

Construction is due to commence shortly on a boutique residential subdivision called The Grange Estate next to the retail complex which will include a range of townhouses and standalone homes.  “The development of this subdivision plus another estimated 160 houses adjacent to this site, on which earthworks are underway, will further expand The Grange retail centre’s customer base,” says Hutcheson.

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