Prime retail with built-in occupancy

Two retail assets beneath a prominent Auckland City hotel are being offered for sale with long-term leaseback structures of up to 25 years, providing rare income certainty in the city’s primary retail corridor, Bayleys brokers say.

Bayleys International Markets associate director, Millie Liang, is marketing Shop 5, 6A and 6B at 396 Queen Street for sale together or individually, with a combined asking price of $2,100,000 plus GST (if any).

The units are located on the ground floor of the Four Points by Sheraton Hotel, positioning them at the intersection of local foot traffic and a steady flow of domestic and international visitors.

Comprising two freehold titles accommodating three proposed tenancies, the portfolio provides a combined floor area of 99sqm (more or less).

Liang says the opportunity has emerged as improving economic fundamentals restore confidence in inner-city investment decisions. “Retail activity in the CBD is benefitting from a growing residential catchment, improving office occupancy, rising student numbers, and a resurgent hotel sector, underpinned by renewed tourism flows and major infrastructure projects including the City Rail Link.

“The proposed tenancy model has been deliberately designed around service-oriented operators that align with hotel adjacency and daily-use demand. The layout supports income diversification, while maintaining operational simplicity, with all tenancies offered on fully net lease structures.”

Liang says a key feature of the opportunity is the ability to secure 25-year leaseback options across each tenancy, structured with an initial five-year lease term and four five-year renewal rights thereafter.

“This long-duration profile is uncommon in central-city retail and provides purchasers with predictable cashflow and reduced leasing risk at a time when certainty is increasingly valued,” she says.

All tenancies will be delivered with design-led, high-spec fit-outs completed by the vendor prior to settlement, allowing purchasers to acquire market-ready assets without incurring additional capital expenditure.

“For owner-occupiers, the configuration also allows for future occupation or brand-specific adaptation, subject to individual requirements.”

The portfolio is projected to deliver a net yield of 6.5 percent, supported by annual rent reviews to CPI and scheduled market reviews every five years.

“In the context of CBD retail, this positions the assets above typical yield benchmarks, while still offering exposure to long-term income growth.”

Liang says adjacency to both the Sheraton and Scenic Hotels further strengthens the investment case. “With two established hotels directly overhead and alongside the site, the retail units benefit from consistent demand for convenience-based services, food and beverage, and wellness offerings. This is complemented by consistent pedestrian traffic along Queen Street from residents, workers, students and visitors moving through the city’s busiest commercial spine.

“Additionally, the properties feature immediate access to public transport, nearby universities, public car parking and future City Rail Link stations, reinforcing their appeal to both tenants and end-users.

“As Auckland Central continues to evolve toward a more balanced mix of living, leisure and work, well-located retail assets with secure income and genuine flexibility become increasingly desirable, providing an attractive mix of income certainty today, and strategic options for tomorrow.”