Prominent Palmerston North property

Prominent Palmerston North property

201 – 203 John F Kennedy Drive, Milson, Palmerston North. Sold on 28th July 2017.

The Property
- 2,440.62m² building and extensive yard area on high-profile 7,454m² corner site
- Fully-leased – anchored by longstanding tenant, NZX-listed Turners Group NZ Limited with secondary tenant, The Workshop (bar)
- Leases of nine and six years, respectively; current terms commenced in 2016 (Turners have been in occupation for 19 years)
- Annual net rental $246,829
- Rateable Value - $3,060,000.00
Quick Look
• On the market for the first time in 19 years
• National Total Property marketing campaign with auction method of sale
• Property marketing generated 54 direct enquiries
• Seven active bidders on auction day with three of these bidding via phone
• SOLD under the hammer to an out-of-town investor for $3,855,000 at a 6.4% yield

The Story

The land and buildings housing one of Palmerston North’s biggest car yards and an adjoining hospitality venue attracted good investor attention when placed on the market.

The property in John F Kennedy Drive – near to one of Palmerston North’s main arterial routes linking the city with the central business district – is home to two tenants: vehicle dealership Turners Cars, and licensed hospitality venue, The Workshop.

Dave and Kate Looney of Bayleys Palmerston North took the property to auction and say the direct enquiry levels on the offering were impressive, with 54 property information memorandums and associated material being sent out to prospective buyers.

Building strong client relationships is a hallmark of the Bayleys’ business. Prior to marketing the property for sale, Dave was involved with liaising between tenants and architects when the refurbishment was being carried out on the property and subsequently renegotiated the leases.

With a yield of 6.4%, the sale of the property proved that regional New Zealand is rewarding commercial property investors well.

Vendor Comment

A seasoned Manawatu commercial property investor sells after nearly two decades of ownership

The vendor lives in Palmerston North and has, over the years, built up a portfolio of local commercial properties that he is now starting to consolidate. While property investment is not his prime focus, he appreciates the opportunities that regions like the Manawatu offers to investors.

When he purchased the John F Kennedy Drive property in 1998, the vendor says it was newly-built and had Turners as its anchor tenant on a long-term lease.

“Turners have showed real commitment to the site and in recent years the property has undergone a major renovation and refurbishment – both structurally and aesthetically – to suit their changing business model,” he says.

“Timing-wise, my decision to sell was based on the fact that the property’s appeal was optimised by the recent upgrade and there was a long lease remaining which would give confidence to a new owner.”

The vendor rates the service and experience demonstrated by Dave and Kate Looney of Bayleys Palmerston North in the marketing and sale of the property highly and says he “was thrilled” by the result achieved under the hammer on auction day.

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