High-end unit takes the biscotti

The Coffee Club premises is on the ground floor of the Metropolis apartment building on High St.

A 262sq m retail unit in Auckland central's upmarket High St, occupied by The Coffee Club and fashion retailer Prosper, is for sale as part of Bayleys' latest Greater Auckland commercial and industrial portfolio.

The property at 42 High St, on the ground floor of the Metropolis apartment building, is producing total net annual rental income of $132,691 plus GST. It is being marketed by Matt Lee, Quinn Ngo and James Chan of Bayleys Auckland and is among 20 Greater Auckland properties which will go up for auction on Wednesday, March 6.

The Coffee Club leases 227sq m, or over 85 per cent of the unit, on a 10-year term from last April, with one 10-year right of renewal, which would take the final expiry of the lease through until April 2033.

"The cafe has been fitted out to a high standard as demanded by The Coffee Club's international branding protocols. This was completed last year so the purchaser will be acquiring near-new, low-maintenance premises with a very long lease in place to an expanding multinational business," says Lee.

"A feature of The Coffee Club lease is its yearly rent reviews tied to the consumer price index plus 1 per cent, which means it will provide a new owner with assured rental growth above the rate of inflation over the next decade. Should The Coffee Club decide to renew its lease for another 10 years in 2023, then the rent will also be reviewed to market at that stage to determine whether any further upward adjustment is required."

Founded in Australia in 1989, The Coffee Club is an international franchise business which has more than 340 cafes across the globe, including 48 in New Zealand.

"The business has expanded rapidly in New Zealand in the past eight years, establishing a strong foothold in the hospitality industry," says Chan. "Its franchise model has been a very successful one ... recognised in the Westpac New Zealand Franchise Awards, with The Coffee Club winning the Food and Beverage Franchise System category in 2013 for the third year in a row and also taking out the Supreme Franchise System of the Year for the second successive year.

"Its cafes are also popular with investors and we have sold a number of similar premises the franchisor has leased as part of their New Zealand expansion in recent times."

The balance of the unit is occupied by Prosper, a men's and women's fashion apparel, jewellery and footwear retailer that has been in the 35sq m shop since 2006. The store stocks a range of modern casual to semi-formal brands, including Claire Barker, Evisu, Diabrock, True Religion, Comme Des Garcons, Gaudi and Diesel.

Prosper's lease runs for four years from September 2013, with one four-year right of renewal and a rent review to the consumer price index scheduled for August 2015.

The property has two secure car parks - one allocated to the Coffee Club and the other leased to a third party and generating additional income of $200 a month plus GST.

Ngo says the unit's fashionable and modern interior matches the high quality of tenancies on display along High St. "Both shops receive excellent exposure, with frontage and entrances facing High St, and the unit is located on the north end of Metropolis, adjacent to the busy public common area and the escalator leading to Level 2. "It benefits from a high level of foot traffic volume on a daily basis. Customers are drawn from the large numbers of passing pedestrians as well as workers based in the area and from Metropolis residents."

Built in the late 1990s, the 40-storey Metropolis is New Zealand's tallest apartment building comprising over 350 residential apartments.

"Metropolis is still widely recognised as one of Auckland's most prestigious buildings and, despite facing challenges from the development of the Britomart, High Street continues to be a popular and well regarded prime fashion CBD retail precinct where a wide range of top New Zealand and international designer labels can be found," says Chan.

"The property is positioned in the centre of High St and provides a fantastic location for retail businesses catering to the high pedestrian count that occurs in the area."

www.bayleys.co.nz/4108859