Clean up with freehold titles in Tauranga's Fraser Cove complex

Godfreys is one of four properties up for grabs. Photo / Supplied

Three freehold titles and a freehold unit title in Tauranga's Fraser Cove Shopping Centre are being marketed for sale by Colliers International.

The properties, which are leased to Number 1 Shoe Warehouse, North Beach Stores, Godfreys and a Contours Gym on new five- to seven-year leases, are advertised in the latest issue of Colliers' National Portfolio and are due to go to auction at 2pm on August 24 at the Sebel Hotel in Tauranga.

"This is a strong opportunity for astute investors to become part of a highly successful and strategically located regional shopping centre operated by the largest privately owned manager of retail property in the country," says Simon, Clark, the director of Colliers' Tauranga office, who believes the retail offering will be attractive to passive property investors.

"The chance to directly own property within an institutional-grade retail centre under management is unprecedented in New Zealand.

"Participation in real estate holdings of this quality is usually only available indirectly through investment in listed property trusts."

Clark claims it is "a New Zealand first" for investors to be able to buy the freehold titles but enjoy a fully managed unit, with a retail manager paid for by tenant who looks after the unit.

"The structure is extremely effective - it works," he says. "It delivers a passive individual income stream without compromising the long-term growth prospects of the centre.

"The greatest security of income for any owner is having a tenant with a successful and thriving business.

"The health and wellbeing of the businesses within the centre is the priority of the manager and in this regard protecting the owner's investment."

This latest offer follows seven first-stage unit sales within Fraser Cove.

In a July 14 auction, Colliers International sold the centre's unit occupied by United Video with an eight-year lease providing $100,000 annually, for $1,410,000 plus gst, at a 7.1 per cent return; and the Liquor Store unit which sold for $777,500 plus gst, with a nine-year lease and rental of $57,000 per annum at a 7.3 per cent return.

These sales followed the sale of the Tikka Express unit and four others earlier in the year by another real estate agency.

John Bowring, Colliers' national auctions manager, says that the united Video and Liquor Store properties were a big auction hit.

"Investors find it easy to see the potential and value in Fraser Cove, which accommodates a long list of the country's top-performing retailers.

"The auction process is a good way of bringing the large number of investors together and determining the market value of the properties on offer."

"Fraser Cove is doing extremely well. It is a great success story in one of New Zealand's fastest-growing regions," says Clark.