The Icon Group (2014) Ltd owner Paul Reid has put St Kevins Arcade on Karangahape Rd up for sale after refurbishing it over the last 2 years.
The 2431m² 3-level retail, office & residential complex, built in 1924, sits on 1250m² at 183 Karangahape Rd and is fully leased with 35 tenancies generating $1.168 million/year net income. The tender through Bayleys closes on Wednesday 14 June, unless sold prior.
Mr Reid said the decision to sell fitted with the company’s commercial add-value business model. The proceeds would be recycled into Icon’s next project.
“We’re very proud of what we’ve achieved with the refurbishment of this iconic building. We’ve spent considerable funds restoring the arcade and carefully choosing quality tenants while still retaining its point of difference & character. We have also de-risked & stabilised the asset for the next owner and believe it will deliver superior long-term capital growth.”
The arcade has 21 ground-floor & basement retail and food & beverage tenants, 6 upper-level commercial suites including a recording studio, 4 apartments and 4 storage & parking units. It has a 22m frontage to K Rd and steps down to Myers Park and the lower end of the cbd.
The refurbishment & restoration included a full interior & exterior repaint & retiling, new roofing and the reinstatement of historical corbels & leadlight glass. Modern building services such as new fibre cabling were also installed and the first-floor offices & amenities and 4 residential units were upgraded.
Bayleys agent Alan Haydock said the property had a weighted average lease term of about 3.5 years and many of the leases had fixed annual rental increases, which would provide the next owner with steady rental growth. Fellow agent Damien Bullick said retailers should also benefit from the opening of the nearby city rail link Karangahape Rd station, scheduled for 2023.
Link: St Kevins Arcade
Attribution: Agency release.