Riding the rail trail's success to new property ventures

An opportunity to develop a business appealing to rail trail cyclists, or add to  Waikato town Paeroa's expanding retail, residential and retirement village growth is available through a main street property for sale.

The  731sq m  site at 60 Belmont St, which is also State Highway 2, housed two separate buildings until three years ago when the vacant office premises at the front burned down and have not been redeveloped.

The 349sq m  building at the rear is leased by boutique candlemaker Amberjack returning $31,200 a year, giving a new owner a holding income while scoping out plans for the property.

It is being marketed for sale by auction on September 26 through Bayleys Hamilton salespeople Josh Smith and Daniel Keane. The property features in Bayleys’ latest Total Property portfolio magazine. 

Smith said a new owner could develop the front of the property immediately or run Amberjack's lease out and redevelop the entire property.

“The property owner decided not to put any new buildings on the site as he now has business interests in Auckland,”  Smith said.

Zoned commercial (8A), the property fronts both Belmont Rd and Willoughby St giving dual access and high exposure to passing vehicle and foot traffic.

After re-purposing the existing concrete wall warehouse with an iron roof, Amberjack uses the premises to produce small batch room sprays and candles by hand.

The company signed a two-year lease in June last year including two two-year rights of renewal, with operating expenses included in the rent and rent reviews at the time of lease renewal.

“While the warehouse holds a seismic rating of 42 per cent of New Building Standard, the owner said simple bracing and strengthening could bring this to more than 67 per cent,”  Smith said.

“With the potential to use the existing tenancy and develop the vacant land bordering State Highway 2, or land bank, the possibilities in the town self-proclaimed as the antiques capital of New Zealand are burgeoning.”

Paeroa is a regional hub and its slogan is “The Best Little Town in the Middle of Everywhere”. It is known for many things, for being  the events capital of Coromandel, the giant L&P bottle, the Maritime Park and Museum, the Karangahake Gorge and the Hauraki Rail Trail.

The rail trail's easy grade and great scenery covers 82km  from Thames to Paeroa, Paeroa to Waihi and then to Te Aroha.  Smith said it  averages 10,000 visitors a month and more than 12,000 visitors in the peak summer months.

The Hauraki District Economic Development unit said there was a demand for more than 200 visitor beds in  the district, and  Smith said Paeroa was an ideal place for much of that accommodation.  

“A backpackers/cyclists' lodge, or a budget motel incorporating an upmarket cafe could be operated from the site, or a small retail development with a range of different shops,”  Smith said.

“The accommodation doesn't have to be of ‘Hilton’ standard, but homely-type run by friendly people interested in what the rail trail offers cyclists.”

The economic development unit said a local Paeroa developer had set up a café/bar/restaurant business and added 14 motel rooms behind to cater for accommodation demand, and the elderly owners of a hobby cafe business in the town spotted an opportunity to provide Devonshire teas to hungry cyclists passing through. 

“There are many opportunities to add value to the rail trail while at the same time running a profitable business,”  Smith said.

Another alternative, he said, could be small units for a range of different trades as the town goes through a building phase with a 45-lot housing subdivision springing up on what was once was a car park at the old race course on the corner of Thames and Raroa Rds. 

The land had been zoned residential for 20 years before anybody took the plunge to develop it and it will provide work opportunities for local contractors and lead to new residents living and doing business in Paeroa,  Smith said.

Also under development is a nearby retirement  village on vacant land at Waimarei Ave that will require local tradesmen and contractors. When finished, the proposed Longridge Country Estate will have 250 units, as well as a 60-bed aged care facility with rest home, hospital, and dementia care. Resource consent has been granted for the first 68 units.

The development will also include a comprehensive luxury recreation and community centre, with a restaurant, cafe, bowling green, croquet, library, picture theatre, full-size snooker table, doctors’ rooms, hairdressing salon and computer room.

Paeroa has also hit the jackpot from Shane Jones' Provincial Development Fund, with more than $700,000 provided to the maritime park marine development project, which will require construction trades workers when it gets underway.

Seventeen kilometres away, in the tiny town of Kerepehi, once considered a Waikato economic backwater, there will be substantial building work at 23 industrial building sites opposite an old dairy factory converted into the first Chinese-owned export-focused ice cream factory in New Zealand. 

Seven of the sites — which range in size from 2020sq m to 12,392sq m  — were sold through Bayleys Hamilton. Proposed structures range from large steel and aluminium framed warehousing and logistics facilities, through to specialised workshops and design/builds.