Petrol station site pumps profit

The Gull service station at 386 Ti Rakau Drive, East Tamaki, will go under the hammer next month.

Ti Rakau Drive offering provides solid returns with possible value later.

A significant land holding in a prime position on Ti Rakau Drive in East Tamaki earning just over $250,000 in annual income from a service station lease will go under the hammer in Bayleys' final Total Property auction on December 3.

Located on a 2121sq m site at 386 Ti Rakau Drive, the freehold property has been occupied by a Gull service station since 2000, with Gull Petroleum (NZ) having a 15-year lease. This is producing net annual rental income of $261,183, with built-in annual increases to the higher of the Consumer Price Index or 2 per cent.

"The property has huge exposure to the main arterial road of Ti Rakau Drive and provides a real opportunity to invest now for a solid return and add value later," says Tony Chaudhary, of Bayleys Manukau, who is marketing it with colleagues Janak Darji and Shane Snijder.

The property comprises a purpose-designed service station, featuring a 226sq m retail and services building, together with a 390sq m canopy over the forecourt area, which has eight petrol service lanes. Gull subleases the retail space to another tenant.

Gull's head lease runs until December 21 next year with one right of renewal only, which, if exercised, would take its final expiry date through until December 2020.

"This gives a new owner a number of options longer term, including possibly developing the site more intensively to maximise its income return," says Chaudhary.

The property is on the northern side of Ti Rakau Drive, a six-lane arterial road providing connections between key growth locations which include Pakuranga, Botany, Whitford and East Tamaki.

"This gives the property massive profile to a high volume of passing vehicles that will be further enhanced once the busway from Panmure to Pakuranga and Botany is completed," Chaudhary says. "It is also located in one of the fastest-growing residential areas in the Auckland region, with a strong established customer base."

Surrounding development varies from industrial and office premises to bulk retail premises, like the nearby Bunnings Warehouse, The Hub and Botany Town Centre. Public transport operates frequently along Ti Rakau Drive, which is also within a few minutes' drive of Highbrook Drive and Pakuranga Rd - the main arterial links to State Highway 1's southern and northern motorways.

"The Ti Rakau Drive offering is among 39 properties scheduled to go up under the hammer next Wednesday," says John Church, Bayleys' national director commercial. He says it is one of the biggest commercial and industrial property auctions to be undertaken by Bayleys in Auckland. Two of the properties have already been sold before next week's auction, while the auctions of another two have been brought forward to this afternoon, because pre-auction offers have been received at a level which the vendors are prepared to sell at.

Church says the auction will cap what looks certain to be the busiest year the commercial and industrial market has experienced since the global financial crisis in 2008. He says that before this year, a shortage of good-quality offerings across all price sectors had been a handbrake on recovery.

What's on offer?

The property: Site leased to Gull service station.
Location: 386 Ti Rakau Drive, East Tamaki.
Agency: Bayleys Manukau.Sales method: By auction, December 3.
Features:

High-profile road frontage.

Earns net annual rent of $261,183.

Built-in annual rent increases.

Potential lease expiry date: December 2020.

Holding income while redevelopment planned.