The 97sq m of retail space, originally divided into three tenancies, is now occupied by just the Lebanese Cafe, including dining and serving areas, a kitchen and bathroom plus a mezzanine storage and office area.
The cafe has one five-year right of renewal on its eight-year lease from November 2010. Its lease has built in rental growth through fixed annual increases to consumer price index (CPI) plus 2 per cent, with adjustments to market every two years if higher than this figure.
To the rear are two separate, fully self-contained residential complexes.
One is 124sq m with six bedrooms while the other is 164sq m with eight bedrooms. They have a one-year lease to a company which subleases the rooms to individual occupants. Extra income is provided by a billboard on the building's side plus six car parks.
"This is an opportunity to secure a high-profile investment property with a good spread of tenant risk across various sectors of the property market in a location that is likely to continue to increase in popularity as the gentrification of K Road continues," says Melhuish. "The area is characterised by a mix of low and medium-rise boutique retail, commercial and residential buildings.
"The property is very conveniently located in relation to the CBD, main public transport routes and motorway linkages, being within 500m of both the on and off ramps to the State Highway 1 and State Highway 16 motorway systems."
The Karangahape Rd precinct is zoned Strategic Management Area 4, with some properties having been converted to higher-intensity mixed residential and commercial buildings, a trend which Melhuish expects to continue. The zoning allows for a basic floor-to-area ratio of 4sq m of building to 1sq m of land, up to a maximum ratio of six to one and with a height limit of 35m.
"This property has appeal to investors looking for opportunities to add value," says Bullick. "They can benefit from the diversified income it provides while considering the future development options that the advantageous underlying zoning offers."
The property will go up for auction on Wednesday, September 18 with several other properties featured in Bayleys' Total Property magazine.
For auction on the same day is the second mixed-use property at 545 Mt Eden Rd which is also being marketed by Melhuish, with colleagues Alan and Phil Haydock.
This is a fully occupied 187sq m character building on a 177sq m site which is producing total net annual rental income of $56,809 from one retail tenancy and two residential flats.
"This is an excellent entry-level opportunity to secure an affordable mixed-use, main-road investment property in the sought-after suburb of Mt Eden," says Phil Haydock.
At ground level is a 58.5sq m retail tenancy occupied by Verlaines, a florist in business for more than 30 years.
Haydock says the florist's features polished timber floors, exposed brick walls and a high stud throughout. The tenant also has a basement storage area of 38sq m. At ground level at the rear of the building is a compact studio flat returning $260 a week that has a large private garden with a northwesterly aspect. On the top level is a larger one-bedroom flat of about 67sq m with gross income of $360 a week.
Haydock says the property has a strong occupancy record being located in a popular commercial part of Mt Eden Rd, two blocks north of Balmoral Rd and near Woodside Rd. Its location in the double Grammar School zone has also proved a draw card for residential tenants.
The third mixed-use building, at 66-70 New North Rd, is also in the double Grammar zone and being marketed by Melhuish and Alan Haydock. The two-level 765sq m character building, also fully leased, is on a 558sq m site producing net annual rental income of $121,731.
Haydock says the ground floor retail space has a wide frontage to New North Rd, a major arterial route linking the upper Auckland CBD to several southwestern suburbs. The property has a second frontage to Ruru St where attractive city living is provided by character residences all overlooking and having access to a landscaped central courtyard. The residential dwellings are all leased for between $300 and $550 a week.
On the ground floor of 70 New North Rd a retail tenancy of about 100sq m is occupied by a liquor store on a six-year lease from September 2011 with no rights of renewal. The space comprises an open-plan retail area with kitchen, bathroom and storeroom facilities behind. Above is a spacious, fully self-contained one-bedroom flat of about 108sq m.
The other end of the building at 66 New North Rd has a floor area of 136 sq m, set over two levels. At ground level, previously used as retail space, is a kitchen and two living areas plus a bathroom and laundry opening out on to the central courtyard. Above are three bedrooms, one of which opens out on to a deck.
Neighbouring 68 New North Rd is also leased residentially and has a similar layout. "Both tenancies offer the potential for reinstatement of the ground floor retail area fronting busy New North Rd," says Haydock.
"These could suit a retailer keen to live and work in the premises and benefit from supplementary income provided by other parts of the property. Alternatively, they could provide an opportunity for an add-value investor who could increase their rental income by reconfiguring them to include retail and refurbishing the residential space."
Two more recently refurbished flats are accessed from Ruru St. One is a fully self-contained 114sq m two-bedroom residence. A mezzanine over the living area is used as a study but could be a third bedroom. The flat comes with two stacked car parks.
The other, 63sq m, flat has a bathroom and open-plan kitchen, dining and living area, which opens out on to the central courtyard at ground level with a mezzanine bedroom above.
"The flats are spacious and receive excellent natural light through their configuration surrounding the pleasant central courtyard," says Haydock.
The property is for sale by tender closing on Tuesday, September 17 unless it is sold prior by private treaty.
"It represents a great long term hold city fringe investment," says Haydock. "The immediate location is characterised by classic turn-of-the-century buildings. Most are low-rise comprising ground floor retailing with the upper levels either offices or apartments or a combination of both.
"There have also been a number of new residential apartment developments completed in the area over the past five years which has seen the local population increase notably.
"The planned underground city rail link will have a beneficial impact on this area long-term and this property is within walking distance of the proposed above-ground Newton Station. This will add to the convenience of a location that is already popular because of its nearness to the CBD and its Grammar zoning."
