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Taupo retail block for sale offers premium opportunity for property investors - Bayleys

Contributor:
Fuseworks Media
Fuseworks Media

A block of shops housing a regional branch of one of New Zealand’s biggest insurance companies alongside a nationally-renowned sporting goods retailer has been placed on the market for sale.

The two-storey premises at 36 Heuheu Street in Taupo’s central business district is home to insurance giant AMI and Stirling Sports.

AMI was founded in New Zealand in 1926 as the South Island Motor Union (SIMU) and is now part of IAG New Zealand, a subsidiary of Insurance Australia Group.

Stirling Sports has been trading in New Zealand for 56 years, and with 60 outlets nationwide, is one of the country’s biggest sporting goods and apparel retailers.

Now the premises at 36 Heuheu Street is being marketed for sale by tender through Bayleys Taupo, with tenders closing on August 5. Salespeople Gary Harwood and Lisa Christensen said the 695-square metre building was located on some 488 square metres of land zoned Taupo Town Centre Pedestrian Precinct under the Taupo District Council plan.

The two tenancies within the Taupo block generate a combined annual net rental of $106,728 plus GST, and encompass:

AMI occupying some 166 square metres of ground floor retail space on a current lease running through to 2023, with one further three-year right of renewal and rental reviews every two years

and

Stirling Sports occupying some 170 square metres of ground floor retail space on a current lease running through to later this year, with three further two-year rights of renewal.

In addition to the street frontage onto Heuheu Street, the corner site overlooks a vehicle access lane linking through Horomatangi Street. The lane leads to five car parks at the rear of the building. Access to the upper-level office space also leads off the car park.

Harwood said that with the building’s entire upper floor currently vacant, there was considerable opportunity to increase the location’s rental returns.

"With the 360-square metre vacant office space on the first floor, there is the option for any new owner of either tenanting the site from an investment perspective, or from an owner-occupier opportunity, relocating their operations to the town centre location," Harwood said.

"The space is currently configured into a multitude of offices, meeting rooms, and storage spaces, all having access to staff bathroom and lunchroom amenities. With views over Heuheu Street the absolute town centre location would suit a professional services firm such as a legal practice or accounting firm, or a healthcare services provider such as dental clinic or doctor’s practice."

A Taupo retail tenancy survey conducted in May last year by Taupo property research firm Keys Valuers reported the town centre had an occupancy rate of 96.1 percent - up from 94.5 percent in May 2018.

"This would be considered to be a strong performance in comparison to other similar regional areas. We (Taupo) now have a very low vacancy rate through

the ‘core’ retailing streets," said the Keys Valuers report.

Christensen said the split configuration and tenancy mix of the property as a whole meant it could appeal to a wide range of either investors or owner-occupiers.

The core of the building was constructed in 1962 with concrete block walls and columns on concrete pad foundations, and was extended in 1968 using similar building methods. The premises now has a new build standards rating of 70 percent.

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