National buyers in mix for Taupo CBD investment

A multi-tenanted commercial building for sale in Taupo’s CBD is expected to attract national interest from add-value investors seeking a foothold in the key central North Island town.

The two-storey freehold property is home to a diverse mix of international, national and local tenants including big-name retailers, health and wellness providers, a leading local hair salon and engineering firms.

Combined with its location on Te Heuheu Street, a main retail and office strip in the tourism mecca, this is likely to ensure wide buyer appeal.

The property’s six tenancies generate a total net rental income of $141,089 plus outgoings and GST per annum, with the potential for a new owner to increase this by refurbishing its three first-floor office tenancies.

The property at 23-27 Te Heuheu Street, Taupo, is being marketed for sale priced at $2.9 million plus GST (if any) through Gary Harwood and Lisa Christensen of Bayleys Taupo.

Harwood said the offering consisted of an approximately 635-square metre building on some 560 square metres of freehold land, with four car parks.

“The property sits on the sunny side of the street and has dual access from both Te Heuheu Street and Gallagher Street, being a major service lane to the rear of the building,” said Harwood.

Ground level is prime retail space, with three long-term tenants anchoring the investment:

-Hair Mechanix & Co, a thriving local salon which has traded for over 25 years, occupies some 108 square metres with two car parks. It pays an annual net rent of $40,000 plus outgoings and GST on a lease extending to July 2022, with three further two-year rights of renewal.

-Some 120 square metres is leased to Australasian clothing retailer Jay Jays. Founded in 1993, this apparel chain now has more than 200 stores in Australia and New Zealand. It pays $43,000 plus outgoings and GST per annum for its Te Heuheu Street outlet. Its current lease runs through to 2023.

-The third ground-floor tenancy of some 118 square metres, with two car parks, is home to a Bay Audiology clinic. With over 115 clinics, Bay Audiology is New Zealand’s largest audiology network. It was voted most trusted hearing-services brand in Reader’s Digest awards in 2020 and 2021. Its Taupo tenancy generates an annual net rental income of $42,000 plus outgoings and GST, on a current lease extending to the end of this year with a further three-year right of renewal.

Christensen said the upper level provided office spaces occupied by three tenants on a month-to-month basis.

“This floor is in original condition, offering the potential to refurbish and modernise the space to attract higher rental returns and long-term tenants,” she said.

The Te Heuheu Street site is zoned by Taupo District Council as part of the Town Centre Pedestrian Precinct.

“This area enjoys high foot traffic and Te Heuheu Street has long demonstrated its ability to attract major national and international brands. Beyond those in the property for sale, they include the likes of Rip Curl, Paper Plus, ASB Bank, OPSM, Unichem, Macpac, Robert Harris and Stirling Sports.

“This impressive line-up of tenants demonstrates the drawing power of this location right in the heart of Taupo, which will underpin future tenant demand for the property for sale. As with tenants, the interest from buyers is likely to extend well beyond Taupo,” Christensen said.

- Article supplied by Bayleys