Investors eye up landmark Trafalgar Street asset

A well-positioned three-storey property for sale on Nelson’s main retail thoroughfare gives buyers the chance to secure a sought-after freehold asset with established income and clear value add potential.

The character building at 121 Trafalgar Street combines ground floor retail with upper level commercial and residential accommodation, delivering diversified income streams and flexibility for investors, add value buyers, or partial owner occupiers.

The building is fully leased and generates total net income of circa-$203,400 plus GST and outgoings across 1,278sqm of lettable space, underpinned by a successful sports and streetwear retailer Backdoor Surf, a Pilates studio, and two residential tenancies.

Backdoor Surf, with more than 20 stores nationwide from Takapuna to Invercargill, occupies the 400sqm retail tenancy and 85sqm warehouse at street level. Its lease has a potential final expiry of 2037 if all renewals are exercised, supported by regular rent review mechanisms. Connect Centre Pilates operates from the character first floor studio, with a lease having a potential final expiry of 2031, and incorporating rent reviews.

The first floor office/apartment is a generous 195sqm with a covered outdoor deck and is held under a commercial lease with a final expiry of 2033 if all renewals are exercised, while the upper level contains a 105sqm two bedroom apartment and a 195sqm three bedroom apartment, both occupied under residential periodic tenancies.

The 721sqm corner site is zoned Inner City Centre – Commercial Zone. It has dedicated off-street carparking for five vehicles plus a loading bay on the New Street side of the property, and there’s a range of public parking options available nearby.

Constructed in the 1920s with a later rear addition, the property was known as the Anstice Building and blends heritage character with practical functionality, with seismic strengthening to 67 percent new building standard, providing confidence for purchasers.

The building has prime frontage to busy Trafalgar Street, offering high visibility and consistent exposure in one of Nelson’s busiest commercial locations, with neighbouring properties including national retailers, independent stores, hospitality venues, and service providers.

Gill Ireland and Seb Hickman of Bayleys Nelson are marketing the property, which has an asking price of $3,200,000.

Located within Nelson's tightly held inner-city commercial precinct, the property benefits from strong foot traffic, proximity to key amenities, and ongoing CBD revitalisation, with Ireland saying there is clear potential for uplift.

“Returns can be enhanced by built-in rental growth, the upper-level accommodation could be refurbished or further optimised by altering the layout, or even adding to the roof space.

“The three-bedroom apartment on the second floor could be made into a four-bedroom residence with an additional bathroom which would provide rental uplift, and an outside area could be redeveloped into a terrace – all with due consent process.

“There could also be opportunity to develop a penthouse level given the height limit under the existing zoning, with buyers encouraged to explore options through council channels.”

Ireland points out that Nelson City Council is encouraging of inner-city living and having a vibrant city centre with a significant upgrade to core services and public spaces strengthening the resilience of essential infrastructure.

“The flagship $78 million Bridge to Better programme, which is jointly funded by the council and the Government, is replacing ageing networks and reshaping Bridge Street and surrounding areas to support intensification, improve accessibility, and revitalise the CBD.

“Construction is well underway, marking a substantial long-term investment in the future of the city centre. And while there may be short-term disruption, the scale of the initiative will give investors' confidence to take a longer term view, with acquisition activity expected to lift as the programme progresses.”

As with other markets across the country, commercial property sales in Nelson have been slower to come to fruition, Ireland says, though solid transactions have still been achieved across all asset classes this year.

“In the current environment, buyers with vision and the capacity to fund acquisitions are well placed to take advantage of softer conditions. Nelson’s investment market continues to tick along, with purchasers becoming increasingly discerning about asset quality and underlying fundamentals.”