Bankable asset for investors in Wanganui

The Wanganui retail property is leased to the ANZ and Whitcoulls

A high-profile corner property is for sale in Wanganui's prime retail strip featuring branches of the ANZ Bank and Whitcoulls on long-term leases.

"This is a commercial asset that will appeal to investors," says John Binning of JLL who is marketing 101-105 Victoria Ave for sale through an expressions of interest process closing on Thursday, June 16.

"The long-term tenants and its location among national and local retailers make this an attractive investment opportunity," Binning says. "Neighbouring retail properties have been recently developed to further enhance this strip which is located opposite Majestic Square."

The 901sq m retail property occupies a 1531sq m freehold site on the corner of Victoria Avenue and Maria Place with large frontages to both streets and includes 22 car parks to the rear of the building.

ANZ occupies the 476sq m corner space with Whitcoulls next door in the remaining 425sq m. The ANZ has an 18-year lease expiring in 2028 and Whitcoulls has a 12-year lease expiring in 2021. The net total rental for the property is $418,478 per annum.

Binning says the modern building was completed in 2009 and has a 100 percent seismic rating.

"Prime yields in Wanganui, like other parts of provincial New Zealand, have strengthened in recent times, driven by investor demand and low interest rates," Binning says.

"Prime retail rents in this provincial centre sit above $400 per square metre and the passing rent for this property is in line with market rental rates.

"The weighted average lease term [WALT] of 8.7 years is very good for this class of asset and the modern construction means a new owner can expect minimal capital outlay."

Binning says the Wanganui District has a population of more than 42,000 residents and much of its economy relates directly to the farming industry surrounding the city. Tourism is providing a major income stream for the district and the local council has undertaken a number of tourism initiatives.

He says the region has been identified by the government as an area with growth potential with the Manawatu-Wanganui region forecast to experience population growth of 2.1 per cent by 2026.

The Manawatu-Wanganui Regional Growth Study was released in July last year. It is an independent report commissioned by the Ministry of Business, Innovation and Employment (MBIE) and the Ministry for Primary Industries (MPI) in conjunction with the region.

The report says: "There is real scope to increase incomes and employment in the region through building on its various strengths, such as its fertile productive land, its location as a natural transport and logistics hub for the lower North Island, its internationally renowned tourist destinations, and its strong food innovation and agri-business research history.

"The region has an abundance of underutilised resources - human, natural and physical - and significant pockets of wealth that could be gainfully employed to improve prosperity for the region and for New Zealand as a whole."

The report points out possible opportunities for Wanganui in terms of new tourism ventures; increased productivity in sheep and beef farming; Manuka honey production; and providing affordable care and lifestyle options for older people.