Terminating lease drives opportunities for rural investors

A property housing two well-established retail tenants in the centre of Morrinsville is on the market for sale.

NV Motorcycles and Morrinsville Hire tenant the 538sq m building on a 3844sq m  site on an intersection at 129 Thames St, the heart of the Waikato town. 

The motorcycle business has indicated it will end its lease in March next year.  

This leaves the front third of the premises free for either an owner/occupier or a new tenant, along with the upside of rental growth.

The property has Matamata Piako District Council rating valuation of $1.2m  and is being marketed for sale by auction in Hamilton on September 26 through Bayleys Hamilton salespeople Josh Smith and Daniel Keane. The property features in Bayleys’ latest Total Property portfolio magazine.

Smith said Morrinsville's commercial activity was growing in line with its proximity to Hamilton and prominent position within the heart of Waikato's dairy industry. 

"Existing businesses within Morrinsville and new enterprises coming into the region are looking for premises to occupy and this property isn't expected to remain on the market for long because of its prime position.”

Located next to the Morrinsville saleyards, the  warehouse and retail area comes with a large  concreted and metalled yard, returning a combined net income of about $72,000 a year.

Fully fenced, with lockable gates at both the front and rear, two thirds of the site is occupied by Morrinsville Hire, a family-based business that has operated from the site for more than a decade.

The business has undercover parking, a large workshop for repairs and maintenance, and a warehouse for storage and office use. It uses a large portion of the concrete yard and driveway for its hire equipment.

Morrinsville Hire is on its first right of renewal of three years on the original three-year term signed in 2015. The lease's expiry date is November 2024 and rent reviews are done on the renewal of the lease every three years.

Occupying the front third is NV Motorcycles, separated from Morrinsville Hire by its own security fence and gate. The premises have undercover storage for motorbikes and ATVs and large workshop and retail space. It is the only local dealership that sells Husqvarna Motorcycles, Motoguzzi and Can-Am off road all-terrain vehicles.

“The property, with a commercial (8A) zoning, has significant frontage to Thames St and rear access to Anderson St, giving it dual entry and high visibility from the nearby State Highway 26, which links Morrinsville and Hamilton,”  Smith said.

“It's prominent position will make it attractive for a wide range of tenants, including, farm-related retail, automotive businesses, farm machinery, a veterinary clinic, or light industrial. It is surrounded by farm machinery company Norwood, PGG Wrightson, farm stores and across the road Annah Stretton Fashion.

“Given an extensive refit, the premises could become destination retail, for example, a small specialised garden centre with possibly a cafe attached,  or any type of small town rural business. 

“Morrinsville is one of the most intensively farmed areas in the world and as a service centre for the local dairy industry, many of the town's businesses are geared towards supporting it and associated rural activities.”

 Smith said a new owner, with attractively fitted out premises, could attract a tenant  willing to pay a higher rent. 

“If the new owner was looking for premises for their own business it would be just a matter of being patient for a few months before being able to move in,” he said.

Morrinsville fits into the district council's town strategies 2013-2033 document forecasts population growth of 44-55 households annually and it outlines plans for business expansion.

The town's business zone comprises a 1.5 km linear strip of land straddling Thames St, between Canada St in the east and Avenue Rd in the west. 

Expansion involves an area west of Marshall St, along Avenue Rd, away from Thames St, which is more commercial in character with a mix of uses including the stockyards, grain storage, service industry, and the motor trade, and has land zoned business, but is still largely vacant.