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Former TAB premises looks a good bet for commercial property investors

The land and building which previously housed the New Zealand Racing Board’s Waikato operations - and which are now occupied by a handful of individual commercial tenants - have been placed on the market for sale.

The three-storey freehold premises at 391 Te Rapa Road on the northern outskirts of Hamilton is 797-square metre building on 1542 square metres of land – incorporating a workshop space with roller door access on the basement level, with storage and office space on the upper levels.

Until three years ago, the New Zealand Racing Board (NZRB) - which runs the TAB betting agency and TAB Trackside TV and radio channels – utilised the premises as the base for its Waikato and Bay of Plenty operations including race-day and on-site filming for Trackside, on-course betting and supporting the local TAB retail network.

On moving out, the property was subsequently tenanted with a broad mix of commercial entities. Combined, the five businesses now occupying separate premises within 391 Te Rapa Road generate $76,348 of rental income per annum. Among the tenancy schedule are:

● Supermarket operator Wellmart Retail Limited which utilises the property for goods storage, on a current lease running through until 2022 with two further two-year rights of renewal

● Master Wen Chinese Restaurant run by Advocating Food International Ltd on a lease running through until 2024, with nine further three-year rights of renewal

● Gulatil and Gill Distributors Ltd on a lease running through to 2023 with three further three-year rights of renewal

● The offices of POS Ltd on a lease running through to 2023, with three further three-year rights of renewal

● Residential letting services firm Gralin Property Management on a lease running through to 2021, with three further two-year rights of renewal.

Scheduled rental reviews for all the tenancies are linked to the consumer price index plus varying additional incremental increases of between two and five percent.

The generally rectangular-shaped block of land and building at 391 Te Rapa Road are now being marketed for sale by tender through Bayleys Hamilton, with tenders closing on December 17 unless sold prior. Salesperson Alex ten Hove said the building was constructed of solid low-maintenance materials and came with some 20 car parks on a fully sealed yard.

“From an investment perspective, the property benefits from having a broad diversification of tenants across multiple business sectors. And with multiple office spaces, the premises opens up the opportunity for an owner/occupier to purchase the site with a view to relocating at some stage in the future,” ten Hove said.

Constructed in 1989 and partly refurbished earlier this year, the building has a new build standards rating of 65 percent. The upper floor of the property is accessed via an internal stairwell located in the entrance lobby to the office tenancies. There are roller door entry points on both the basement and ground floor levels of the building.

Encompassing two titles, the property has a combined Hamilton City Council ratable valuation of $1.85 million. The address is zoned for industrial use under Hamilton City Council’s city plan – with Te Rapa Road being Hamilton’s main northbound arterial route.

Te Rapa’s tenancy mix contains a number of ‘big box’ DIY and building trade operators such as Bunnings and Mega Mitre 10, along with vehicle dealerships, furniture showrooms, and commercial services companies. Te Rapa also houses the sprawling retail shopping hub known as The Base.

“Hamilton’s Te Rapa corridor is contained within a council zoning which recognises existing office and retail activities which have been established under previous planning regimes. The council’s industrial zoning for this property provides for the continuation of existing office and retail activities while also opening the opportunity of developing the location into a more industrial use,” ten Hove said.

“The establishment of any new or additional retail or office activities tenancies is not envisaged in the Te Rapa area. So the future of 391 Te Rapa Road allows a development-focused buyer to take either the property in either a commercial or industrial route, taking advantage of the existing use format.

“Hamilton Council’s industrial zone provisions seek to ensure that city’s industrial land is not occupied by land activities that are non-industrial - unless those activities are either ancillary to industrial activity, support industrial activities, or are more appropriately located within an industrial environment than a business centre.”

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