Fairy Springs shops in Rotorua sell at tight yields
Bayleys has brokered the sale at auction of four shops in a Rotorua development by Tony Bradley.
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Bayleys has brokered the sale at auction of four shops in a Rotorua development by Tony Bradley.
Mr Bradley’s TPB Properties has built a suburban retail hub at Fairy Springs on the northern fringe of the town on the former Oderings Nursery site overlooking State Highway 5 on the main route in and out of Rotorua from Auckland and Tauranga.
It is an almost identical development to his recently completed Redwood Centre, which is about 3km east of the central business district, where Bayleys brokered the sale of 14 shops late last year.
There are 10 shops in the Fairy Springs development. Bayleys was marketing five of them on new leases for spaces ranging from 87m2 to 279m2.
Tenants include a Skyline Superette, BurgerFuel, seafood shop, bakery and sushi outlet. Other tenants include Fairy Springs Medical Centre and Pharmacy but it is being retained under TPB Properties’ ownership.
The 120m2 Burger Fuel outlet sold with a 10-year lease for $655,000 at a 5.95% yield on net rental income of $39,000 a year with 3% annual increases (on all the leases); the 87m2 Best Sushi outlet, sold on a six-year lease for $390,000 at a 6.69% yield on net rental income of $26,100 a year; the 130m2 Springs Bakery, sold on a six-year lease for $507,000 at a 6.66% yield on net rental income of $33,800 a year; a 279m2 superette, sold with 6-year lease for $762,000 at a 6.56% yield on net rental income of $50,000 a year.
Meanwhile, Rotorua’s central city area is experiencing the highest number of vacant shops in decades. A recent Telfer Young survey found the retail vacancy rate is 16.2% based on tenancy numbers, with 87 vacant shops - the highest since the Telfer Young survey began in 1989.
Chris Hutching for NBR NZ Property Investor
Fri, 24 Apr 2015
Fri, 24 Apr 2015
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Fairy Springs shops in Rotorua sell at tight yields
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