A fully tenanted freehold unit-titled retail investment property in the main street of Rotorua’s CBD, could find traction with first-time commercial investors say agents marketing the offering.

The 835sqm property at 1266 Tutanakei Street is underpinned by a 68-percent new building standard seismic rating and strong returns.

Longstanding occupier, travel and outdoor goods’ company Kathmandu Limited’s original lease commenced December 2007. There are three years remaining on its current lease, with one four-year right of renewal to be exercised taking the potential final lease expiry out to December 2031.

Kathmandu Limited is part of NZX-listed KMD Brands.

Coffee outlet Fix Café occupies a “hole in the wall” 5.6sqm space with a shop window facing out onto Tutanakei Street. It has a short-term lease with a discretionary option to vacate with three months’ notice.

Brei King, Mark Slade and Damien Keenan of Bayleys Rotorua are selling the property, with an asking price of $2,850,000 plus GST.

King says the recent reduction in price reflects the vendor’s motivation to move the property on, and with term deposit rates trending downwards for money sitting in the bank, new entrants to the commercial property market, or those looking to add to an existing portfolio, will appreciate the returns.

“The annual net income sits at around $252,000, so there’s a compelling yield of more than 8-percent to be realised here,” she says.

“Kathmandu recently undertook a comprehensive internal remodel to bring the store up to date with its current brand standards and the location suits them well, as evidenced by their 17-year tenure to-date.

“This stretch of Tutanuakei Street between Hinemoa and Eruera Streets is a preferred retail block, with other national occupiers including Pascoes, Macpac, Stirling Sports and toy retailer Toyworld which recently returned to the Rotorua CBD after an 11-year absence from the city.”

King says given the wide frontage to Tutanakei Street and the generous floor area, the unit could be split into two more equal-sized tenancies in the future to broaden the occupier appeal.

“Another benefit is the rear access lane off Hinemoa Street, and roller door access to the back of the property.

“The zoning is City Centre Zone 1, which accommodates vibrant retail, hospitality and commercial accommodation. The general area around the subject property has benefitted from the council’s CBD revitalisation strategy which saw the creation and opening of the Te Manawa – Heart of the City shared zone and improved public spaces towards the lake end of Tutanakei Street.”