Airport Oaks retail centre has multiple income streams

Aerial view of retail centre for sale at 55 Montgomerie Rd, Airport Oaks.

A fully leased retail centre earning total annual rental income of $568,217 from 10 tenancies in the Airport Oaks business precinct has been placed on the market.

"The tenants at 55 Montgomerie Rd include national brand names Icebreaker, Bendon and Hollywood Bakery," says Brad Johnston of Colliers International who, with colleagues Paul Jarvie and Greg Goldfinch, is selling the property by deadline private closing at 4 pm on December 10 unless it sells earlier by negotiation.

The centre also houses a sushi shop, a beauty therapist, a charity shop and a pub with an outdoor courtyard.

"Situated in a fast growing business precinct adjacent to Auckland International Airport and just off the main road into the airport where it captures a steady flow of customers, this property is a strong draw card for investors," says Johnston. "Its diversified cash flow as a multi-tenanted retail property will appeal to buyers looking to split their capital risk across various sub-sectors of the retail market," he says.

"It is a well-established centre and known to many people as a convenient place to stop off for shopping and food while travelling to and from the airport."

Jarvie says the property, which was constructed in 2007 and extended in 2013, makes an ideal low maintenance holding. "It's a modern building in good condition. The owner has invested significantly in ongoing maintenance and lease management, resulting in a high quality investment property."

The two level building, on a 5048 sq m freehold corner site, encompasses a net lettable area of 1630 sq m and comes with 91 off-street car parks.

The retail units are between 122 sq m and 406 sq m in size and most tenants have rights of renewal in their leases giving a weighted average term of 4.66 years.

"In response to demand, the owner extended the building last year to provide four new tenancies," Johnston says.

"Many of the tenants have been in occupation for several years and benefit from the high exposure to passing traffic. It has become the principal retail centre in the Airport Oaks business subdivision," he says.

Johnson says the property has a significant 130 metre long street frontage to Montgomerie Rd, between the intersections of Richard Pearse Drive and George Bolt Memorial Drive.

Goldfinch says the property's easy-to-understand and strong fundamentals, along with the continuing popularity of retail investments among investors, is expected to generate a strong level of inquiry.

"Airport Oaks is an established and popular business location with many national and international corporations occupying superior quality facilities," he says. "With the strong growth in property development in recent years, there are now around 20,000 people working in and around the airport area. In addition to travellers entering and leaving the airport along George Bolt Memorial Drive, this strong neighbouring worker catchment underpins the future viability of this retail centre."

Goldfinch says Colliers International's 2014 New Zealand retail property market report, released last month, forecasts higher rents and rising capital values in the retail sector as tenant demand grows and landlords become more confident.

"The forecast rise in capital values is expected to fuel further investment demand for high-quality retail property as rents rise and yields firm," the report states.

Jarvie says Airport Oaks is only 16 km from the Auckland CBD via the State Highway One motorway and access to the west will be greatly improved with the opening of the Waterview Connection joining State Highway 20 with State Highway 16.

"Manukau and key markets south of Auckland, such as Hamilton, are also easily accessible from Airport Oaks," he says.

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