Fully Leased CBD Retail/office Complex Offers Six Of The Best For Investors

A fully leased retail/office building with six diverse tenants in the heart of Tauranga’s CBD has been placed on the market for sale.

The two-storey property sits prominently with some 20 metres of frontage to busy Grey Street, in an area that enjoys some of the city’s heaviest foot traffic. The site is fully leased to a rich mix of businesses, from menswear and photography stores, to a jeweller, a legal practice, a recruitment firm and a business software provider.

The three retail and three office tenancies generate total net rental income of $202,906 plus outgoings and GST per annum.

The freehold land and buildings at 38 Grey Street, Tauranga, are being marketed for sale by auction on Wednesday 9 March (unless sold prior), through Mark Walton, Brendon Bradley and Lynn Bradley of Bayleys Tauranga.

Walton said the offering consisted of a well-presented building of approximately 844 square metres on some 743 square metres of land.

“The site has been developed with the building positioned at the front and 16 off-street car parks to the rear. Pedestrian access is from the Grey Street frontage and there is a side service lane running down the northern boundary.

“Originally constructed in the 1950s, the structure underwent a seismic upgrade in 2013 and has an Initial Evaluation Procedure seismic rating of 70 percent of new building standard.

“The lower level contains three retail tenancies, each with their own bathroom facilities, while the three office tenants are accommodated on level one with shared toilets and shower,” Walton said.

Key rental details include:

• Molyneux Jewellers occupies a ground-floor retail space of some 146 square metres, paying net annual rent of $35,500 plus outgoings and GST. Its current lease runs through to 2025, with a further three-year right of renewal.
• Carters Photographics leases some 127 square metres of retail space and two car parks. It pays net annual rent of $35,640 plus outgoings and GST, on a lease that extends to December 2023.
• Menswear outlet Murray Watts Mansworld pays annual net rent of $39,900 plus outgoings and GST for its 140-square metre street-front premises and two car parks. Its current lease runs through to mid-2022.
• Moran Legal Services’ first-floor office tenancy of some 143 square metres with three car parks generates net rental income of $30,240 plus outgoings and GST per annum. Its current lease runs through to 2024 with a further two-year right of renewal.
• Personnel Resources Temp Resources Limited pays net annual rent of $25,701 plus outgoings and GST for its approximately 141-square metre offices, on a lease extending to mid-2025.
• Business software provider Zeal Systems occupies some 144 square metres with six car parks, on a lease extending to 2025. It pays net annual rent of $33,794 plus outgoings and GST.

Brendon Bradley said one of the property’s key attributes was its prime CBD position.

“The site is located on the eastern side of Grey Street, between CBD landmarks the Goddards Shopping Centre to the north and Piccadilly Arcade to the south.

“Grey Street has arguably become the most popular and preferred location in the CBD thanks to its diverse mix of businesses, high occupancy rates and excellent on-street parking,” said Bradley.

Lynn Bradley said the site’s position within the City Centre zone, in an area where building heights of up to 49 metres are permitted, presented future owners with significant potential for multi-level development.

“The Tauranga CBD is already experiencing major redevelopment and transformation, including numerous large-scale retail, office and residential apartment developments. This activity has been spearheaded by the likes of the recently opened Farmers multi-level retail and residential complex on Elizabeth Street.

“Opportunities to invest in prime commercial property in the CBD are scarce in the current market. The fully-tenanted Grey Street offering will position new owners ideally to reap the rewards of the CBD’s revitalisation which will result in a more dynamic city centre for the future,” Lynn Bradley said.

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