Historically low vacancy levels in Hamilton's Frankton industrial area and low interest rates have turned a property leased by a South African specialty products business is on the market for sale as a mouth-watering investment bite.
The Lekker Shop on the corner of Grasslands Place and Kahikatea Drive – one of the city's busiest roads – has a lease running until 2034. The outlet gives Hamiltonians an authentic taste of biltong, boerewors and other meats.
Situated in a prime position at 1 Grasslands Place, the property returns a rental of $39,100 annually with the potential for this to be lifted with further development. It is now being marketed for sale by private treaty closing on March 13 through Bayleys Hamilton salespeople Alex ten Hove and Mike Swanson.
Mr ten Hove said the two-storey, 420 square metre food grade premises, with an operational chiller and freezer and roller door access to storage, were used as a wet fish operation in the past. As well as the food operation area, the recently redecorated premises includes a shop on the ground floor, while the level above consists of office space, toilets, showers and a kitchen area.
“The industrial-zoned building set back from Kahikatea Drive/Grasslands Place sits on a freehold 1019 square metre site and has 15 sealed car parks at the front making it a tasty morsel for passive or add value buyers as well as developers wanting a future project,” he said.
“With yields ranging from slightly under 5 percent, now is a good time to buy. Low interest rates have meant many commercial property owners holding onto their investments, making it difficult for potential buyers to find properties with value add or expansion opportunities.
“Hamilton's booming economy and increasing population, partly due to migration from nearby regions during the past five years, is leading to large-scale growth and development, particularly in the industrial sector.”
Neighbours to The Lekker Shop include The Mad Butcher, Volare, Fish City and Cycle Time, while the wider Frankton industrial area has a mixture of light to heavy industrial businesses, including many agri-based companies such as Gallaghers, Waikato Tractors, Dairy Blenders NZ, Milfos-GEA and others.
Mr ten Hove said the well-presented property had good frontage to Kahikatea Drive (State Highway 1) with 30,000 vehicles passing by daily creating “great marketing opportunities”, and had strong holding income.
“Frankton is a location underpinning some of the Waikato’s most innovative and successful businesses,” he said.
It is one of the city's oldest suburbs and industrial centres. A 10-20 year neighbourhood plan has been developed by the Hamilton City Council to enhance its history centred on rail, its special character and its economic identity based on a tradition of 1500 small to medium-sized businesses mainly in the automotive, service, manufacturing and retail industries, generating $700 million in GDP a year.
The plan includes developing three key sites – 0.8 hectares in one commercial zoned title adjoining the railway corridor on High Street, the former 3.4 hectare Hutton's factory site in three titles and seven lots on the corner of Lincoln and Masey-Hall overbridge and the 2.35 hectare stockyards in three titles and 16 lots on Norton Road, as well as establishing a business improvement district, delivering a better business services plan and reducing red tape.
Mr ten Hove said Grasslands Place was about three kilometres southwest from the city centre and has easy access to all the major arterial routes including State Highways 1, 3 and 39. The Waikato Expressway, due to be completed this year, will give Hamilton and its industrial areas a major growth boost. The expressway will provide 102 kilometres of four-lane median-divided highway running through the city beginning from the south of Cambridge and extending to the Bombay Hills where it will link with the Southern Motorway.
“It is part of a rush of infrastructure development to cope with unprecedented growth in the golden triangle of Tauranga, Hamilton and Auckland,” he said.