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Portfolio sell down provides plethora of possibilities

The portfolio has been accumulated over many years and a decision has been made to sell all the properties. The offering encompasses a prime Ponsonby Road property with three tenants and considerable add-value potential, four North Shore retail and food and beverage investment offerings and residential development and investment opportunities in Ellerslie and Mt Wellington.

All seven properties will go under the hammer at Bayleys’ next Total Property auction in Auckland on August 24, unless sold before that date.

“This represents a fantastic opportunity to acquire part or all of a diverse, split-risk investment portfolio,” says James Chan, Bayleys Auckland-based international sales director who is managing the sale with colleagues Quinn Ngo and Karen Yung. “Underpinning the value of the portfolio is the fact that all of the properties are well-positioned in high-profile, high-growth, tightly-held Auckland locations.

“Buyers can bid on individual properties or all of the portfolio depending on their circumstances. The trustees have given us clear instructions – they want all properties sold and will meet the market.”

The Ponsonby offering comprises a single-level character building on 366sqm of land at 293-297 Ponsonby Road in the Three Lamps shopping hub. James Chan says the building has exceptional road front exposure with parallel on-street parking right outside.

“The property benefits from the affluent surrounding commercial and residential catchments of St Marys Bay, Herne Bay and Ponsonby and is in a location that rarely has any vacancy.”

The building is split into three tenancies with Chances Fashion, which has around 13 North Island stores; Okumandi Restaurant, Auckland's first South African-fusion eatery which also utilises an outdoor courtyard at the rear; and iCandy Nail on various lease terms. These three tenancies are currently generating total annual rental income of $159,645 plus GST.

Chan says the property’s real value lies in the future upside potential of the underlying land holding which has a flexible Town Centre zoning. “The new owner could benefit from the existing cash flow while exploring ways of unlocking and optimising the true value of this underutilised site.”

Quinn Ngo says the North Shore properties in the portfolio are all located in retail hot spots, with three in Albany and one in Wairau Valley – a split-risk investment opportunity located at 3/8 Link Drive.

The Wairau Valley property has two established tenants occupying the high-exposure two-level premises adjacent to a busy central roundabout in the heart of the Link Drive bulk retail precinct. The Hollywood Bakery & Espresso occupies the ground floor on a six-year lease until January 2024, with one six-year right of renewal. This lease has two-yearly fixed rent reviews based on the consumer price index (CPI) plus two percent.

One of Auckland’s largest music academies Able Music Studio occupies the upper level on a three-year lease expiring May 2024. This is one of seven branches covering various Auckland suburbs including the CBD, East Auckland, Henderson, Epsom and more.

The property is currently producing net annual rental income of $94,000 plus GST and offers an opportunity for investors or future owner-occupiers, says Ngo.

Further north, 323sqm retail/showroom premises at Northridge Plaza, a well-established retail hub at 100 Don McKinnon Drive in Albany’s bustling town centre, could also have appeal to both investors and owner occupiers, says Ngo.

Residential real estate developer Eden Living currently uses the premises as showroom accommodation. In occupation since 2019, it exercised the first of two one-year rights of renewal in June 2022 at an increased rental of $113,362p.a.

“Ample customer car parking at the front of the premises, shared with a mix of other quality tenants, as well as staff parking at the rear adds to the appeal of this property in the tightly-held Northridge Plaza where there are currently no vacancies,” says Ngo.

The other two Albany offerings in the portfolio are restaurant premises which will have appeal to smaller investors, says Steven Liu of Bayleys Commercial North Shore. One is a 92sqm unit located at 21 Corinthian Drive on the fringe of Albany town centre occupied by Yang Guo Fu Chinese restaurant on a six-year lease until mid 2025 plus two six-year rights of renewal. The lease has annual rent reviews, with the 2022 review resulting in the property’s net annual income being increased to $74,867.55 plus GST and outgoings.

“This is a well positioned offering in a zero vacancy, recently completed Asian cuisine precinct with triple road exposure to Corinthian Drive, Data Way and the Albany Expressway,” Liu says.

The food and beverage unit at 86 Bush Road, Albany has a three-year lease to Yasu Japanese restaurant until November 2024, plus two three-year rights of renewal, and is producing net annual rental income of $48,719 plus GST.

“This is an ideal entry-level investment opportunity which would provide an affordable first step into the commercial property market,” says Karen Yung. “It is located in a modern neighbourhood commercial centre, with a variety of professional tenancies servicing a fast growing and diverse residential and commercial catchment.”

The property is adjacent to Pinehurst private school, with over 1,000 students, and Albany Oak Motel and a short drive away from Massey University and Albany’s town centre.

The remaining two properties in the portfolio are central Auckland residential offerings. One is a development opportunity encompassing an 827sqm flat parcel of land zoned Mixed Housing Suburban at 23 Gavin Street, Ellerslie. It has resource consent for five two-level townhouses with three bedrooms and two bathrooms as well as for two vehicle turntables to maximise vehicle manoeuvrability.

“A currently vacant dwelling offers potential holding rental income while you action the current consent or pursue other plans for the site,” says Karen Yung. “The property is close to Ellerslie’s town centre and train station and is zoned for highly regarded Ellerslie Primary/Intermediate School.”

The other property at 217A Penrose Road, Mt Wellington is a well maintained, three-bedroom house with a fireplace and heat pump that meets Healthy Homes standards on a half share of 1012sqm cross lease site. A residential tenancy is providing $660 per week.

“This is a centrally located investment property with excellent access to public transport, with bus stops and Penrose train station nearby, and is also close to the Mount Wellington and Sylvia Park shopping centres.”

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