A high-profile property with a blue-chip corporate tenant in the rapidly developing suburb of Manurewa presents buyers with the opportunity to secure a premier passive investment.
6-8 Maich Road, Manurewa is a 1517sq m building on a 3,092sq m freehold site that is undergoing a significant refurbishment before incoming tenant CityFitness begins a 15-year lease that includes two further rights of renewal for six years each. The annual net rental income from the lease agreement will be $402,058 plus GST, subject to final measure.
The property has 48 dedicated car parks offering convenience for gym members and is positioned in a central Manurewa location, which is only three minutes’ walk to Southmall and the recently refurbished train station. The site is also located near key arterial routes offering connectivity north and south and is in a high-growth residential catchment.
Colliers directors Gareth Fraser, Matthew Barnes, and Shoneet Chand have been exclusively appointed to market the property for sale via deadline private treaty closing at 5pm on Wednesday 16 March, unless sold prior.
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CityFitness are one of the largest health club operators in New Zealand with a network of over 40 locations across the country.
They have assessed 6-8 Maich Road, Manurewa as a critical step in their future expansion plans for Auckland, being one of the last remaining catchments for their network. Given their scale and dominance in their sector, CityFitness are considered an A-grade tenant.
Fraser, Auckland Director of Investment Sales at Colliers, says this offering represents a prime purchasing opportunity to secure a large-scale site with a strong tenant covenant.
“Commercial terms, including all of the relevant documents, have been agreed with CityFitness making this a unique turnkey investment opportunity,” Fraser says.
“The tenancy agreement also provides a 2 per cent annual increase in rental income from the third anniversary with a market rent review to take place on renewal, providing favourable terms for potential buyers.”
The building has over 90m of road frontage to Maich Road and was originally constructed in 1998 with an extension and refurbishment in 2010 taking the property to its current dimensions, which includes the courtyard.
The property features an ISA report which rates the seismic strength of the building as 85 per cent NBS, or A-grade.
Barnes, Director of Investment Sales at Colliers, says the refurbishment of the building has begun in anticipation of the incoming tenant with the handover expected to be completed in April.
“The building will be substantially refurbished to suit the change of use from hospitality to a health club but largely the improvements on-site are in excellent condition following the previous refurbishment in 2010,” Barnes says.
“The most recent fit-out completed at a CityFitness site can be seen at their Westfield Newmarket location, which is one of Auckland’s most popular gyms.”
Chand, Director of Investment Sales at Colliers, says all of the fundamentals are in place that will make this a highly desirable asset with a steady rental stream.
“It is rare to see the mixture of an A-grade tenant and a refurbished building on a prime landholding such as this one, which also has future growth potential,” Chand says.
“The site is strategically located and will be served by the surrounding area that includes a number of prominent commercial businesses, retail stores, and education facilities. The train station is nearby, and it is only 20 minutes’ drive to Auckland’s CBD via State Highway 1.
“Manurewa is an area that is undergoing intensive gentrification and will continue to experience further development in the coming years.
“The property is zoned Business – Light Industry Zone under the Auckland Unitary Plan. This provides significant long-term upside given the scale of the 3,092sqm landholding, and significant potential to up-zone to a higher density use with flexibility for redevelopment.”
- Article supplied by Colliers
