88-94 Town Centre, Te Anau IM

88 - 94 Town Centre | Te Anau

Information Memorandum For Sale by Deadline Private Treaty

closing Tuesday 14 May 2024 at 4pm (unless sold prior)

Accelerating success.

Introduction

Colliers have been appointed exclusively to market for sale 88 - 94 Town Centre, Te Anau.

This property is being offered For Sale by Deadline Private Treaty closing Tuesday 14 May 2024 at 4pm (unless sold prior).

This information Memorandum provides preliminary information to assist interested parties with their assessment of the property. Further information is available via an online data room available on request.

colliersotago.co.nz/67027877

Data room link: propertyfiles.co.nz/ property/TownCentreTeAnau

Data room documents available:

• Information Memorandum

• Record of Title

• Lease Documentation

• Land Information Memorandum

• Sale & Purchase Agreement

• Seismic Assessment

All enquiries, requests for information and arrangements to undertake inspections in relation to this opportunity are to be directed to the sole agents.

Rory O’Donnell

+64 27 445 3982 rory.odonnell@colliers.com

Mark Simpson

+64 27 4906 394 mark.simpson@colliers.com

Executive Summary

88 - 94 Town Centre, Te Anau

DESCRIPTION

Originally developed in circa 1965 for the Te Anau Post Office, 88-94 Town Centre now provides a modernised single storey commercial building in the heart of Te Anau’s commercial precinct, providing good rental income from three established tenants.

TENURE Freehold

LEGAL DESCRIPTION

CERTIFICATE OF TITLE

AREA

LOCAL AUTHORITY

ZONING

RATEABLE VALUE (as at Oct 2022)

TENANTS

CURRENT CONTRACT RENT

CURRENT LEASE TERM EXPIRIES

NBS RATING

SECTION 2 SURVEY OFFICE PLAN 11559

SL9C/373

Land 1,577m² (more or less)

NLA 575m² (subject to survey)

Southland District Council

GRZ - General Residential Zone (Commercial Precinct)

Capital Value - $1,150,000

94 Town Centre - Fiordland Real Estate Ltd

90 - 92 Town Centre - Taste St Limited

88 Town Centre - Subway Realty New Zealand

$103,461.18 + GST and outgoings

Tenancy 1 - 31 March 2026 (plus 2 rights of renewal of 5 years)

Tenancy 2 - 31 March 2025 (plus 3 rights of renewal of 4 years)

Tenancy 3 - 30 November 2031 (plus 2 rights of renewal of 5 years)

76% - refer to dataroom for report

Investment Highlights

Flexible Area

NLA 575m² (more or less)

Land area 1,577m² (subject to measure)

Vehicle Access

Vehicle access to the rear of the property including tenant parking

Good Tenant Mix

Fully-leased to three established tenants

Town Centre Location

Within the heart of Te Anau’s Commercial Precinct, and within 400m of the lake front

High Yielding Investment

Returning $103,461.18 p.a. plus GST and outgoings

The Building

Originally built circa 1965 for the Te Anau Post Office this single level building has undergone various alterations/refurbishment over the years. The most recent was the extensive refurbishment in 2022 of the Subway and Ditto tenancies, which included new internal layout and fit out. The remaining Ray White tenancy appears to be the original layout and is presented in good condition for its age. The building has a total gross floor area of 600m² (more or less) with a total net lettable building area of 575m² (exclusive of outdoor patios) which is broken down between the separate tenancies as follows:

Ray White tenancy

Ditto tenancy

Subway tenancy

189m²

248m²

138m² (areas subject to measure)

Construction comprises the following:

Foundations: Concrete slab foundations

Walls: Reinforced Concrete Portals around the perimeter of the buildings using timber trusses onto a continuous concrete lintel outer beam. Exterior cladding is predominantly stone veneer over timber framing.

Joinery: Predominantly aluminium joinery throughout the refurbished Ditto & Subway tenancies with timber framed single joinery to the Ray White tenancy.

Roof: Long-run painted tray roofing.

Interior Linings: Predominantly Gib-board walls and ceilings throughout with some areas of suspended tile and corrugated ceilings.

Other Improvements: Durable composite decking, large paved seating areas with glass balustrade, access ramps and railings.

Tenancy 1 Summary

Comments

Market rent reviews due 1 April 2024 (has not been exercised), 1 April 2027, 2030 & 2033. CPI rent reviews due 1 April each year in which there is not a market rent review.

*

only.

Location

88 - 94 Town Centre is located in the heart of Te Anau’s commercial precinct. Located on the southern side of the Town Centre, just off Luxmore Drive (SH94), this is the main street providing access through the commercial precinct toward the Lakefront Drive. The majority of surrounding uses comprises a mixture of local and tourism focused retail, as well as a good variety of hospitality and visitor accommodation complexes. Located on a 1,577m² site with effectively two street frontages, the property enjoys a northerly aspect to Town Centre with 30 metres of road frontage, comprising predominantly council car parking and some landscaped areas. To the rear of the site is a secondary frontage to Little Park Lane which provides access and on-site tenant car parking.

Te Anau is the gateway to Fiordland National Park and Milford Sound. The township benefits from a significant number of domestic and international visitors, particularly over peak summer months and shoulder seasons. Te Anau is also a popular holiday destination particularly for the wider Southland community with a large number of holiday homes. Over the past decade there has been steady growth in the township with a significant number of new dwellings constructed, particularly to the north side of the township. With Queenstown, Arrowtown, Wanaka and Cromwell becoming more unaffordable for holiday home owners this has had a positive flow on affect to Te Anau.

Access to Te Anau is via State Highway 6 and State Highway 94 from Queenstown, State Highways 1 and 94 from Dunedin or via the Southern Scenic Route from Invercargill. All roads leading to Te Anau and Manapouri travel through diverse terrain and interesting scenery.

Distances

• Te Anau to Milford Sound 120 kms (74.5 miles) allow 2 hours driving

• Queenstown to Te Anau 170 kms (105.5 miles) allow 2 hours driving

• Invercargill to Te Anau 152 kms (94.5 miles) allow 2 hours driving

• Dunedin to Te Anau 290 kms (180 miles) allow 4 hours driving

Zoning

* boundary indicative only

Territorial authority

Southland District Plan status Operative

Zone

Zone description

GRZ - General Residential Zone (Commercial Precinct)

Residential areas function as the Southland District’s main centres of population, culture and socio-economic activity.

The district’s residential areas, defined as the General Residential Zone, encompass the principal towns of Winton, Te Anau and Riverton/Aparima and the smaller townships of Balfour, Browns, Colac Bay/Oraka, Edendale, Lumsden, Manapouri, Mossburn, Nightcaps, Ohai, Otautau, Riversdale, Oban, Tokanui, Tuatapere, Waikaia, Wallacetown and Wyndham. The District’s Residential Zones are recognised as predominantly residential areas but provide for a range of activities.

Commercial Precincts are defined within the General Residential Zones in Te Anau, Winton, Riverton/ Aparima, Otautau, Edendale, Lumsden, Tuatapere, Riversdale and Wyndham as key locations within which the Council seeks to encourage commercial activities. The Commercial Precincts enable the co-location of commercial activities, which can enhance the function, integrity, convenience and viability of the commercial centres of these townships. Commercial Precincts can also reduce the likelihood of land use conflicts with non-commercial land uses.

Permitted Activities and Development Controls within this Zone include the examples listed below.

Permitted activities

The following activities are Permitted Activities within the GRZ - General Residential Zone:

1. Residential Activities (not located within the Commercial Precinct) that comply in all aspects with the GRZ - General Residential Zone for the Residential Zone.

2. Visitor Accommodation (involving five or less paying guests).

3. Commercial, Community, Educational, Rural Service, Entertainment Activities, Service Stations and Visitor Accommodation (involving six or more paying guests), located within the Commercial Precinct that comply in all aspects with the GRZ - General Residential Standards.

4. Temporary Events (subject to conditions a-g).

5. Home Occupations provided that: (a) A maximum of 30 m² of the gross floor area of the residential or accessory buildings on the property is used for the operation of the home occupation. Plus conditions (b-c).

6. Activities on Council Reserves provided that: Any activity specifically complies with an approved management plan.

Development controls

There are a number of restricted discretionary activities including:

1. Any permitted activity which fails to comply with no more than one GRZ-General Residential standard, or no more than one condition of the permitted activity rule and is not within the National Grid Yard.

2. Residential activities within the commercial precinct that comply in all aspects with the General Residential standards.

3. GRZ-R3-Discretionary Activities.

The following activities are discretionary activities:

1. Any activity that cannot be undertaken as a permitted, restricted discretionary or non complying activity and is not listed as a prohibited activity is a discretionary activity.

2. GRZ-R4-Non Complying Activities.

The following activities are non complying activities:

1. Industrial activities

2. Offensive trades

Te Anau Market

The Te Anau commercial property market has been relatively subdued over the last four years with limited sales activity in the Commercial Property Sector. Tourism still remains one of the key economic drivers for Te Anau, with tourism numbers only now starting to get back to the pre-Covid levels seen in 2019, which has been challenging for the region that has such a reliance upon tourism. Other factors affecting Te Anau’s commercial market is the seasonality of the tourism industry which enjoys strong visitor numbers, both domestic and international, from October through to the end of April with the peak period from December to March, while in the winter months the town becomes quieter with some business’ effectively going into hibernation for a few months. The challenge for Te Anau as we experience greater visitor numbers is to attract more of these visitors to overnight, or multi night stays, which will improve the visitor spend into the area and has historically been dominated by nearby Queenstown.

Off the back of the strong tourism numbers at present, we are seeing limited vacant space available with good demand from new tenants wanting to enter the market, and buildings currently in the process of being refurbished including earthquake strengthening ready for new tenants. Such as, the old H & J’s department store building which was sold with vacant possession. Additionally, with the higher interest rates we are seeing more investor interest in areas such as Te Anau that offer higher returns than commercial properties in Queenstown and Wanaka.

Other sectors also showing signs of green shoots is the construction/land development area which has seen Te Anau effectively double in size over the last twenty years. With a significant amount of Crown land sold to Ngai Tahu in the early 2000’s, this opened up the opportunity for a significant amount of residential and lifestyle subdivisions with circa 1,000 sites developed and sold. More recently 117 sections developed in Fiordland Estates have been sold over a two year period with circa 30 houses built or under construction. We are also aware of a new proposed industrial subdivision comprising 3.9ha which will be subdivided into 35 lots of varying sizes and is now 75% sold down, with land values at circa $400/m².

Deadline Private Treaty Sales Process

A deadline sale is the process of purchasing real estate through confidential submitted written offers. If you want to buy a property by deadline sale, you prepare your best offer and send it to the vendor’s Agent to consider alongside any other offers the vendor receives at any point in the deadline sale campaign.

The property is offered for sale with no price, with a deadline by which offers need to be submitted on the basis that the vendors reserve the right to accept an offer at anytime before the deadline sale closes.

Buying by deadline sale is a relatively simple process, with advantages for the purchaser as well as for the vendor. However, it’s not simply a matter of turning up on the day and writing down what you’d like to pay. It’s worth doing full due diligence early to know your rights and obligations and to ensure you feel comfortable with the process .

To help you better understand how deadline sales work, we’ve put together a list of key things you’ll need to do before submitting an offer.

• Arrange finance. This is very important. You need to be comfortable with the level at which you’re offering. It’s fine to put a finance clause into the contract, but bear in mind that a vendor may favour the most straightforward offer on the d ay.

• Read the contract. The ‘Sale and purchase agreement’ is the contract signed by the potential purchaser at the time of submitting a deadline sale offer. If your offer is accepted, it will then be signed by the vendor and become a binding contract. It contains a legal description of the property and terms of settlement. We recommend you engage legal advice before presenting an offer.

• Know the value. If you have been studying the market, you may have a good idea of what the property is worth. If you need help, your real estate Sales Consultant can refer you to similar properties which have sold recently that are a good comparison. Otherwise you could arrange for an independent valuation.

How to make an offer:

• Know the process. Talk to your Colliers Agent about exactly what will happen on and before the deadline sale closing day.

• Talk to your Colliers Agent when formulating your offer. They can assist you in looking at comparable sales and provide information enabling you to make an offer you’re comfortable is the current market value.

• Consider your conditions carefully. Where possible it’s best to minimise the conditions on a deadline sale offer, however it’s also advisable to not spend a large amount in advance when there is a chance your offer may not be selected. B alance is the key.

Due Diligence

To assist in the assessment of this offering, comprehensive due diligence information is available via a secure documents link. For access to all documents please register your interest with one of the agents.

• Information Memorandum

• Record of Title

• Lease Documentation

• Land Information Memorandum

• Sale & Purchase Agreement

• Seismic Assessment

All enquiries, requests for information and arrangements for site inspections are to be directed to the Colliers sole agents:

Rory O’Donnell

+64 27 445 3982

rory.odonnell@colliers.com

Mark Simpson

+64 27 4906 394

mark.simpson@colliers.com