A low-rise commercial property with development potential, prominently-located in Papakura’s town centre on the eastern side of Great South Road, is on the market for sale by its owner, Ardmore Group Limited.
Anchored by retailer Farmers – which occupies more than half the total lettable area of 8,584 square metres – the balance of the building is leased to a hair salon, a café and an office tenant, with a modest 46-square metre space formerly occupied by travel business, Flight Centre, currently vacant.
Farmers opened on the corner site in August 1919 and the store’s 100-year anniversary and longstanding contribution to the Papakura community was recognised with an exhibition at the Papakura Museum last year.
Farmers has shown further commitment to the area with a new nine-year lease signed in February this year with two, six-year rights of renewal and reviewed to CPI and market at regular intervals.
The café has an initial 10-year lease and the office tenant five years, with the property as a whole having a weighted average lease term of 8.5 years.
The property returns a net annual income of $851,491 plus GST.
The concrete and steel framed three-level property at 146-152 Great South Road was built in the 1990s and has undergone exterior upgrades since. It has a documented seismic assessment of more than 100 percent of new building standard.
Zoned Metropolitan Centre under the Auckland Unitary Plan (operative in part), the underlying zoning allows for commercial, leisure, high-density residential, cultural, community and civic uses.
James Hill, Sunil Bhana and Tony Chaudhary of Bayleys are marketing the property for sale by tender, closing August 6.
Hill said while the property in its current configuration is representative of a functional split-risk investment, its true value could be unlocked through the redevelopment of the upper car park level to take advantage of the broad zoning.
“Effectively that gives a new owner 3,413 square metres of land in the sky – literal upside for this property which already enjoys a favoured spot in the town’s retail strip,” he said.
“Commercially, it could work for a childcare centre, leisure facility, a coworking office initiative or more traditional office accommodation, but the scope extends beyond this.
“As the Metropolitan Centre zoning would allow residential development above a retail base, the property could have appeal to a forward-thinking investor who will be taking note of higher-density housing initiatives in other Auckland town centres and seeing that the model could work here, too.”
Hill said admittedly it may not seem the obvious location for residential occupancy, but it’s the way of the future.
“With wider Auckland land values escalating and a shortage of land starting to catch up with towns like Papakura, this car park space will undoubtedly have a higher and best use.”
The property’s height variation overlay of 40.5 metres under the Unitary Plan would give a developer flexibility to greatly extend the building’s vertical footprint to optimise the 5,450sqm site.
It has dual site access with the Farmers tenancy having pedestrian access off Great South Road and vehicular access to the upper level car park from O’Shannessey Street. There are 213 on-site car parks – some under cover – and a warehouse with a roller-door associated with the Farmers’ operation.
Eraze Hair Studio and Beans and Leaves café are also accessed from O’Shannessey Street.
The “shop local” mantra being touted to reinvigorate the New Zealand economy is epitomised by Papakura which is becoming more of a one-stop town centre.
“Our understanding is that the Farmers’ store is well-supported by the local and rural community and it seems that residents are keen to spend locally – particularly post-Covid-19,” Bhana said.
“Greenfield site development in the broader Papakura area is contributing to growth of the available residential catchment and the underlying value of commercial land in the town centre should be resilient.
“There’s plenty happening south of Auckland with a lot of money being pumped into infrastructure, and hubs like Drury undergoing a major metamorphosis to ultimately provide greater employment opportunities.
“The recent Government announcement that electrification of rail from Papakura to Pukekohe is one of 11 national projects to be fast-tracked is another positive initiative for the area.
“This will streamline the journey to and from the city for commuters and make Papakura’s residential fundamentals even stronger.”
The Real Estate Institute of New Zealand's House Price Index recently showed that Papakura was one of just four out of 28 districts recorded to register a gain between March and May.