A fully-leased commercial complex at the gateway to Queenstown is on the market.
Comprising two two-level retail and office buildings, Terrace Junction is adjacent to the high-profile BP roundabout, between State Highway 6 and Frankton Road.
It also shares an entrance with Queenstown’s busiest service station, BP.
The 40-plus tenants, including leased carparks, generate annual rental income of $1,411,399, plus GST and outgoings.
The two biggest are Westpac bank and Burger King, which together contribute 32 per cent of the rent.
Other tenants include veterinary clinic VetEnt, Two Wild Sisters cafe, property management company Housemart, MacStudio Design, bathroomware company SpazioCasa, surveyors and planners Patterson Pitts Group and Todd & Walker Law.
The floor area of 6175 square metres also includes 72 basement carparks, while there are 40 above-ground carparks.
The complex was developed by local couple Di and Lindsay Williams in 2008/09, and was jointly designed by Archimedia and Dalman Architecture.
It’s nowadays owned by a syndicate of private investors and managed by commercial property manager MHP Ltd.
Local Colliers International brokers Mark Simpson and Rory O’Donnell are marketing the property for sale by tender, closing May 31.
Simpson says for a number of reasons it’s “a very strategic asset”.
It enjoys what he calls “exceptional exposure” to SH6 and Frankton Rd, not only from local motorists but also tourist traffic, much of it coming and going from the nearby airport.
O’Donnell says the location also makes it a handy shopping centre for residential areas like Frankton, Shotover Country and Lake Hayes Estate.
It’s also close to the Frankton Flats, which are rapidly growing as a commercial hub for the Queenstown-Lakes and wider Central Otago regions.
Simpson adds that it’s very rare for a commercial property of this scale to become available in Queenstown’s tightly-held market.
He explains that having such a range of tenants whose leases all expire at different times spreads the investment risk.
The property’s also for sale while Queenstown’s enjoying an extended period of growth, he notes.
In his view, the complex would suit an institutional investor, a high-net-worth individual or another property syndicate.
“Australian funds are starting to look at Queenstown from a commercial perspective now.”
Compared with the CBD, Simpson says Frankton offers a comparatively higher yield.
Mountain Scene investigations indicate that commercial sales that have occurred at Frankton range between five and 6.5 per cent yield, which would put the value at $20 million-plus.
Because of its strategic location and other qualities, Simpson is confident the sale will attract a lot of interest.
The property, he believes, “will be considered a trophy asset among buyers”.