Medical centre sites able to deliver healthy rental return

The interior of the Royal Oak Medical Centre on Manukau Rd. Photo / Supplied

Two Auckland medical centres are included in Bayleys' latest Total Property portfolio of commercial, retail and industrial properties for sale around New Zealand and will be auctioned in Bayleys' Auckland auction room on September 23.

The largest on offer by rental value and being marketed by James Chan and Quinn Ngo, of Bayleys Auckland, is the St Lukes Radius Medical Centre in St Lukes Rd, near one of the busiest shopping centres in the country, Westfield's St Lukes.

Chan said much of the value of property lay in the prominent 1108sq m site at 99 St Lukes Rd that provided good on-site parking for patients with access via a wide driveway but in a prime location for redevelopment.

He said that under the Residential 7a zoning in the Auckland City Council's Operative District Plan 1999, the property could accommodate up to five residential units on a density basis provided resource management requirements were met. Healthcare services are listed as a Discretionary Activity in the Residential 7a zone.

"This makes it a good land banking opportunity given the publicity about Auckland's looming house shortage. A new owner may want to redevelop the property once the lease is up."

The medical centre currently has a three-year lease in place from 2008 and a one-year right of renewal. The property is producing net annual rental income of $77,763. It encompasses a 127sq m villa, which was built in 1910 and has been converted for its medical centre use. This has been subdivided into a reception/waiting lounge, five consulting rooms for its medical staff, an office, laundry, two separate toilets and a staff lunchroom.

Further south, the premises of the Royal Oak Medical Centre at 691 Manukau Rd is being marketed by Chan and John O'Brien, also of Bayleys' Auckland office.

The unit-titled centre of about 209sq m operates out of space on the first floor of the Royal Oak Shopping Centre and was first opened in 1988 with expansion and refurbishment work undertaken in 2001.

All the fit-out, including air-conditioning units and partitioning, belonged to the property's vendor, O'Brien said.

The unit has a current lease of three years and the right to renew until 2021 and is producing net annual rental income of $50,625. The medical centre is complemented by other on-site health-related businesses such as a pharmacy and optometrist which also operate out of the mall.

O'Brien said the Pak'n Save supermarket which adjoins the shopping centre had recently been upgraded.