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Market Valuation
46 Spring Street
CBD
Tauranga
Client: Prime Investment Group
Valuation Date: 24 June 2016
TelferYoung (Tauranga) Limited
++ Local Knowledge, National Coverage telferyoung.com
Table of Contents
1.0 Executive Summary........................................................................................................................ 3
2.0 Scope of Work ................................................................................................................................ 5
3.0 Legal Description ............................................................................................................................ 8
4.0 Rating Valuation and Statutory Charges ........................................................................................ 9
5.0 Location ........................................................................................................................................ 10
6.0 Land .............................................................................................................................................. 11
7.0 Resource Management ................................................................................................................ 12
8.0 Environmental Issues ................................................................................................................... 12
9.0 Improvements ............................................................................................................................... 13
10.0 Tenancy Details ............................................................................................................................ 19
11.0 Operating Expenses ..................................................................................................................... 33
12.0 Valuation Methodology ................................................................................................................. 34
13.0 Market Commentary ..................................................................................................................... 35
14.0 Valuation Considerations .............................................................................................................. 38
15.0 Market Rent Assessment ............................................................................................................. 39
16.0 Sales Evidence ............................................................................................................................. 49
17.0 Valuation Rationale ...................................................................................................................... 55
18.0 Risk Analysis ................................................................................................................................ 63
19.0 Valuation ....................................................................................................................................... 65
20.0 Conditions of Valuation ................................................................................................................. 65
21.0 Statement of Limiting Conditions and Valuation Policy ................................................................ 66
Appendix A: Computer Register
Appendix B: Additional Photographs
Appendix C: Planning Map
Appendix D: Tenancy Plans
Appendix E: Graphs
TelferYoung (Tauranga) Limited
Level 2, Westpac Building, 2 Devonport Road, P O Box 455, Seventh Avenue Tauranga 3140, NEW ZEALAND
Phone : 07 578 4675 Facsimile : 07 577 9606
email : tauranga@telferyoung.com website : www.telferyoung.com
1.0 Executive Summary
Asset Valued: 46 Spring Street, CBD, Tauranga
This is a City Centre Zoned property of 1,523 square metres situated to the
south eastern corner of Grey and Spring Streets, within the heart of the
Central Business District of Tauranga city. The property has an excellent
sight line along Willow Street. It contains a three level building which has a
somewhat striking design that is well known as a landmark within the city
area. To the ground floor there is a retail style arcade. Whilst to the upper
levels there is a series of office tenancies. At the rear there are four on site
car parks. Professional advice indicates that the building has a seismic
rating of 70% NBS.
Purpose of Valuation: Market Value for financial reporting purposes
Instructing Party: Scott McKenzie
Client: Prime Investment Group
Report Prepared For: Prime Investment Group
c/- Property Managers Ltd
PO Box 234
Tauranga 3140
Attention: Scott McKenzie
Date of Inspection: 24 June 2016
Date of Valuation: 24 June 2016
Interest Valued: Fee Simple 676923
Basis of Valuation: Market Value - with existing tenancies
Land Area: 1523m² (more or less)
Rentable Floor Area: 3227.8m²
Tenancy Summary: Contract Rent Analysis
Tenant Lease Type Rentable Area Rate Premises Carpark Other Passing
Area (m2) ($/m2) Rent Rent Rent Rent
Energy Bar Net 107.7 $153.16 $16,500 $0 $0 $16,500
Spring Street Cafe Net 213.0 $139.20 $29,650 $1,040 $0 $30,690
Diamond Design Net 126.2 $356.63 $45,000 $0 $0 $45,000
Blur Eyecare Net 110.4 $389.42 $43,000 $0 $0 $43,000
BNZ Net 293.0 $431.78 $126,500 $0 $2,000 $128,500
Ray White Commercial Part Gross 380.8 $131.30 $50,000 $0 $0 $50,000
Langtons Lingerie Net 128.6 $330.51 $42,500 $0 $0 $42,500
Bohemian Tattoo Net 238.4 $156.00 $37,188 $0 $0 $37,188
Cornell Institute Gross 325.3 $184.46 $60,000 $0 $0 $60,000
Property M anagers Limited Net 197.8 $174.73 $34,560 $0 $0 $34,560
Beauty of Plenty Net 61.8 $194.11 $12,000 $0 $0 $12,000
Level 2 Vacant Tenancy Net 280.7 $0.00 $0 $0 $0 $0
Tauranga City Council Net 1,088.0 $180.00 $195,840 $2,600 $0 $198,440
Net Contract Rent: $678,059 per annum plus GST
Net Market Rent: $736,870 per annum plus GST
Weight Avg Lease Term: 3.5 years remaining.
The Executive Summary must be read in conjunction with the formal valuation report and with TelferYoung (Tauranga) Limited's Statement of Limiting Conditions and Valuation Policy.
3
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga City telferyoung.com
Valuation Methodology: The Market Value has been established by:
+ Income Approach
+ Market Approach
+ Cost Approach
Valuation: Ten Million Three Hundred Thousand Dollars ($10,300,000) plus GST (if
any).
Indicating:
Yield on Passing Income: 6.58%
Yield on Market Income: 7.15%
Resultant IRR: 7.49%
Property Risk Profile: The property is considered to have an average risk profile in comparison
with other commercial properties in the locality.
Conditions of Valuation: If you intend to use this valuation for mortgage finance your lender will
likely require the valuation report to be re-addressed to them.
TelferYoung policy is that reports cannot be readdressed for any
purpose beyond 90 days from the date of valuation. This policy has
been set to meet professional indemnity insurance requirements. It is a
condition of this report that any valuation needing to be readdressed
beyond 90 days may require re-inspection by the valuer with an update
fee charged.
Deeds of lease being fully executed as detailed in this report.
Report Issue Date: 6 July 2016
Valuer: Paul Higson - B.Comm (VPM) ANZIV MPINZ
Registered Valuer
Director
The Executive Summary must be read in conjunction with the formal valuation report and with TelferYoung (Tauranga) Limited's Statement of Limiting Conditions and Valuation Policy.
4
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga City telferyoung.com
2.0 Scope of Work
2.1 The Valuer
The valuation has been undertaken by Paul Higson who provides this objective and unbiased
valuation. The valuer has no material connection with the instructing party or interest in the property
and has the appropriate qualifications and experience to undertake the valuation.
2.2 Our Client
Prime Investment Group.
Other than the client or addressee, the report may not be relied upon by any third party. We accept no
liability to third parties. Written consent is required for any third party wishing to rely on this report. We
reserve the right to withhold that consent, or to review the contents of the report if consent for third
party use is sought.
2.3 Purpose of the Valuation
Market Value for financial reporting purposes.
2.4 Asset Valued
46 Spring Street, CBD, Tauranga.
2.5 Basis of Valuation
We are to provide our opinion of Market Value which is defined in International Valuation Standards
2013 as:
The estimated amount for which an asset or liability should exchange on the valuation date between a
willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the
parties have each acted knowledgeably, prudently and without compulsion.’
2.6 Relevant Dates
Inspection Date: 24 June 2016
Valuation Date: 24 June 2016
2.7 Extent of Investigations
We have carried out an inspection of exposed and readily accessible areas of the improvements.
However, the valuer is not a building construction or structural expert and is therefore unable to certify
the structural soundness of the improvements. Readers of this report should make their own enquiries.
This report has been prepared for valuation purposes only and is not a geotechnical or environmental
survey. If any defect is found, including structural defects, this information could impact on the value
of the property.
No allowances are made in our valuations for any expenses of realisation, or to reflect the balance of
any outstanding mortgages either in respect of capital or interest accrued thereon.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com
We have not been provided with an environmental audit of the property and we are not aware of any
potential environmental concerns. Our valuation and report assumes that the land and buildings are
unaffected by harmful contaminants or noxious materials which may impact on value.
We have not conducted a land survey of the subject property and assume all improvements lie within
the title boundaries.
We have not sighted a current Land Information Memorandum for the subject property during the
course of this valuation. Our report is subject to there being no outstanding requisitions or adverse
information affecting the property.
2.8 Nature and Source of Information Relied Upon
Information used to prepare the valuation has been obtained from our property inspection and public
records. Additional information relied on includes:
Name of Document Source of Document
Computer Register Land on Line
City Plan Tauranga City Council
Lease documentation Property Managers Limited
Operating expenses data Property Managers Limited
Earthquake Strength Report Property Managers Limited
2.9 Assumptions and Special Assumptions
Standard valuation assumptions made in completing the report are stated in 'Extent of Investigations'
and 'Statement of Limiting Conditions and Valuation Policy'.
2.10 Reporting Format
We have provided a formal valuation report meeting all appropriate valuation and professional
standards.
This report must be read in conjunction with TelferYoung (Tauranga) Limited's Statement of Limiting
Conditions and Valuation Policy.
6
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com
2.11 Valuation Standards
Our valuation has been prepared in accordance with International Valuation Standards 2013 and
Australia and New Zealand Valuation Guidance Notes and Technical Information Papers including:
+ IVS - Framework
+ IVS 101 - Scope of Work
+ IVS 102 - Implementation
+ IVS 103 - Reporting
+ IVS 230 - Real Property Interests
+ IVS 300 - Valuations for Financial Reporting
+ ANZVGN 1 - Valuation Procedures - Real Property
+ ANZVGN 2 - Valuations for Mortgage and Loan Security Purposes
+ ANZVGN 9 - Assessing Rental Value
+ ANZRPGN 1 - Disclaimer Clauses and Qualification Statements
+ ANZRPGN 4 - Methods of Measurement
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com
3.0 Legal Description
Identifier: 676923
Land Registration District: South Auckland
Legal Description: Lot 1 Deposited Plan S.39394
Estate: Fee Simple
Area: 1,523 m² (more or less)
Proprietor(s): As shown in Appendix A
Interests: A Mortgage to ASB Bank Limited
Comments: In completing our valuation we have disregarded the existing
mortgage interest, with the property valued as if unencumbered by
mortgage.
Appendix: Copy of the Computer Register is included as Appendix A
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com
4.0 Rating Valuation and Statutory Charges
4.1 Rating Valuation
As at 1 July 2015
Component Value
Land Value $3,780,000
Improvements $6,530,000
Capital Value $10,310,000
Rating Valuations are conducted on a mass appraisal basis, generally once every three years, in order
to provide a basis to assist territorial authorities to collect revenue through rates. Individual properties
are not inspected on a regular basis and changes in the improvements may not be recorded. The
rating values are expressed on a Freehold Estate basis, even when the property might be leasehold.
4.2 Statutory Charges
As at the date of valuation, the rates per annum (inclusive of GST) are as follows:
Council Value
Territorial Authority $45,772.05
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com
5.0 Location
Sourced from QuickMap
Appendix C attached show the location of the property within the Tauranga central business area. It is
conveniently situated within easy walking distance of the city NZ Post premises, other trading banks,
professional offices and commercial services. The immediate area is one where retail/commercial
services and civic amenities predominate with the main retail centre being bounded by Willow Street,
Wharf Street, The Strand, Devonport Road, Elizabeth Street, Grey Street and lower Spring Street.
The civic block containing Baycourt a venue for conferences, shows and other cultural activities; the
Library, car parking facilities and the administration offices for the Tauranga City Council are all
located in the adjacent Willow/Wharf/Durham/Hamilton Streets block.
Of considerable influence on the environment of the central business area is the 'Edgewater' project
that was completed in the mid 1990’s by the Tauranga City Council. This project involved the
upgrading and beautifying of the heart of the City Centre with some $12M being spent on repaving the
streets and footpaths, planting of trees, installing seating and overall beautification with the aim of
linking the business area to the waterfront. The predominant theme is nautical with a touch of the
Mediterranean. That area of Spring Street between The Strand and Willow Street is closed to regular
vehicular traffic and is a paved mall.
The 2015 Tauranga City (Central Business District) Pedestrian Count shows the Blur Opticians
th
location was ranked 13 out of the 37 points sampled. The Spring Street café area was ranked 31st.
st
The closest point on Grey Street was Books a Plenty / Step in Shoes and this area was ranked 1 and
th
nearby on Spring Street Mall South (Red Square) was ranked 5 . There are now signs that the
exodus of businesses from the CBD has been reversed and some high profile tenants are or will be
moving back into the CBD. The mooted redevelopment of the Civic Centre (situated approximately
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com150 metres to the north) is currently be considered by Council and this development has the potential
to further revitalise Taranga’s CBD.
Public car parking is at present available on The Strand reclamation and a car parking building to the
corner of Spring and Durham Streets with metered parking also available to both sides of the streets
adjacent to this property. The Spring Street Mall (known locally as Red Square) lies just to the north
east of the property.
6.0 Land
Sourced from Mapi
Area: 1523 m² (more or less)
Frontage: 31.08 metres to the eastern side of Grey Street, a corner splay of
1.87 metres and a frontage to the southern side of Spring Street of
35.33 metres.
Depth: 42.29 metres (approximate) to the southern boundary
Shape: This is a regular shaped corner site. 31.08 metres to the eastern
side of Grey Street, a corner splay of 1.87 metres and a frontage to
the southern side of Spring Street of 35.33 metres.
Contour: The land is of more or less level contour. Drive on access is
available to the site from Grey Street.
Services: Services to the site include water supply, natural gas, electrical and
telephone reticulation together with sewage and stormwater
disposal. Spring and Grey Streets are cobbled, kerbed and
channelled with cobbled footpaths, feature lighting, seating and
trees. There is on street metered parking to the nearby streets.
Comments: Good sun is received. The vast majority of the site is taken up with
the building development. There is though a sealed driveway and
small parking area to the rear of the site.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com7.0 Resource Management
7.1 Zoning
Territorial Authority: Tauranga City
Plan Status: Operative
Zone: City Centre Zone
Zone Description: The purpose of the City Centre zone is to maintain and enhance the
role and function of the city centre as the principal retail, commercial,
civic, entertainment and cultural centre of the city and the Western
Bay of Plenty sub-region. Zone provisions enable a wide range of
land-use activities to establish within base environmental standards
Development Controls: The zoning provides for a range of uses with the following being
among the listed permitted activities (subject to certain conditions):
- Accessory buildings and activities.
- Ancillary retail and offices.
- Business activities other than offensive trades.
- Community facilities.
- Minor public recreational facilities.
- Emergency services.
- Places of assembly.
- Residential activities.
- Schools and tertiary education premises.
- Visitor accommodation.
Comments: The current uses of the site appear to be permitted activities (though
subject to certain conditions).
The city centre has zones of different permitted building heights. We
note that for the subject property's location the permitted building
height is 49 metres above the Moturiki Datum (the local average sea
level). The ground level at the subject property varies from
approximately 3 to 4 metres above the Moturiki Datum (according to
Council information).
8.0 Environmental Issues
8.1 Contamination
We have not been provided with an environmental audit of the property and we are not aware of any
potential environmental concerns. We refer you to our Statement of Limiting Conditions and Valuation
Policy on matters relating to potential contamination.
8.2 Land Information Memorandum
We have not obtained a Land Information Memorandum (LIM) report for this property.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com9.0 Improvements
9.1 Overview
This three storey structure was originally built in the 1950s. In 1986 the building was renovated and
extended. Earthquake strengthening works and internal retrofitting of level 1 space was undertaken in
early to mid 2015. To the ground floor there are seven tenancies. Level 1 currently has two tenancies
whilst Level 2 currently has three tenancies.
See Appendix B for additional photographs.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com9.2 Building
9.2.1 Floor Areas
The approximate floor areas are as follows:
Gross Floor Area Rentable Areas
Ground floor: 1,439.0 m²
Level 1 (1st floor): 1,440.8 m²
Level 2 (2nd floor): 858.7 m²
Mezzanine floor: 36.2 m²
Diamond Design - Gr floor 105.0 m²
Diamond Design - Mezzanine 21.2 m²
Spring Street Cafe 189.9 m²
Ray White Commercial 190.4 m²
Blur 110.4 m²
BNZ 293.0 m²
Beauty of Plenty 61.8 m²
Energy Bar - Gr floor 92.7 m²
Energy Bar - Mezzanine 15.0 m²
Langton’s Lingerie 128.6 m²
Bohemian Tattoo 256.6 m²
Tauranga City Council 1,088.0 m²
Property Managers Limited 197.8 m²
Cornell 325.3 m²
Vacant area 280.7 m²
The floor areas are based on the ‘The Guide for the Measurement of Rentable Areas’ (revised June
2013) published jointly by the Property Council of New Zealand (PCNZ) and the Property Institute of
New Zealand (PINZ), and also as summarised in Australia and New Zealand Real Property Guidance
Notes (ANZRPGN) 4 – Methods of Measurement.
We note that some of the above floor areas show a slight variance to the areas mentioned in the
lease. This may be because the above areas include a share of the common areas.
9.2.2 Construction
Foundations: Concrete footings and floor slab.
Flooring: Concrete to each level with timber in fill in places.
Exterior Walls: Curtain wall glazing, stone panels and plaster with painted brick veneer,
fibre cement sheets and concrete blocks to the rear wall. We note that the
street frontages to levels 1 and 2 have distinctive mirrored glazing.
Framing: Reinforced concrete columns and beams plus concrete blocks.
Roofing: Galvanised iron.
Joinery: Aluminium with feature mirrored glazing in places.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comInternal Linings: Mainly Gibraltar board walls with suspended soft board ceiling tiles and
lighting panels.
9.2.3 Description
The ground floor provides access to the upper levels, a rear parking area, seven ground floor
tenancies and a central walkway with common toilets.
Central walkway: Tiled floor with security grills at the access points from both Grey and
Spring Streets. This centre walkway provides access to the ground floor
tenancies and also to the ground floor entry foyer. There is a door to the
rear parking area via the rear passage. The main walkway has a slight fall
between the Grey Street and the Spring Street levels.
Ground floor entry foyer: Main stairs to the upper levels. There is also a lift entry. This area is tiled
and has surplus space which could accommodate a small kiosk type
tenancy or an ATM. Access to the entry foyer is via double glass doors to
the exterior.
Common toilets: Mens and ladies toilets with each having a toilet and hand basin. In
addition there is a disabled toilet room with a toilet, hand basins and
extractor fan.
Rear parking area: Five car parks are provided. Two of these are within a securable and
covered area. The remaining three are located just to the rear of the
building.
Second stairwell: Door to the Grey Street frontage, stairs to level 1 (Bohemian Tattoo
tenancy).
Third stairwell: Door to the service lane, stairs to the upper levels.
Lift: This is a Schindler 13 person (920 kilogram) lift.
Ray White Commercial Realty Tenancy:
Reception: Glass double doors to the exterior.
Front office area:
Meeting room: Doors to the front and rear areas.
Rear office area:
Staffroom: Stainless steel sink, laminate bench top, under bench and over head
cupboard space and drawers.
Diamond Design Tenancy:
Main retail area: Glass doors to the internal arcade walkway.
Mezzanine: Stairs to the ground floor.
Spring Street Café Tenancy:
Main retail area: Timber framed double doors to the internal arcade walkway. The main
retail area comprises a large open plan area. There is a split level with
there being a small seating area to the western end which is at a slightly
higher level. To the rear of this tenancy there is a door to the rear storage
(garage) area.
Rear storage: Part of the garage area.
Beauty of Plenty tenancy
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comMain area: Glass doors to the exterior. Kitchenette with a stainless steel sink,
laminate bench top, under bench cupboard space and drawers and a hot
water heater. We note that the tenancy has been partitioned at the tenants
expense.
Langton’s Lingerie Tenancy:
Main retail area: Double and single entry doors, rear room, stairs to the mezzanine.
Mezzanine: Store and kitchenette with a stainless steel sink bench, under bench
cupboard space and drawers. This area has a ceiling height of
approximately 2 metres.
Energy Bar Tenancy:
Main area: Glass doors to the exterior (two sets), split level flooring, stairs to the
mezzanine. The ground floor has a split level.
Mezzanine: Open office or storage accommodation.
Blur Tenancy:
Main retail area: Double doors to the street frontage and interior arcade walkway. Internally
there is an office, store and another partitioned room, plus the main retail
area. This is a long thin tenancy.
BNZ Tenancy:
Main retail area: Automated opening entry doors to the exterior (at the corner of Spring and
Grey Streets). This area contains the main teller area, three interview
rooms and one office area.
Store room: Door to the interview room.
Rear room: Open plan office which gives access to the rear of the ATM machine.
Staffroom: Stainless steel sink, laminate bench top, under bench and over head
cupboard space and drawers, space for a microwave.
9.2.4 Description – First Floor (Known as Level 1)
The first floor provides access to the lower and upper levels and three landings. At present there is
one large unoccupied (thought leased) tenancy and one smaller leased tenancy provided to this level.
Common Spaces:
Spring Street Landing: Stairs to the upper and lower levels, lift entry.
Male Toilets: Three toilets, four hand basins, three urinals, four showers plus a benched
changing room area.
Female Toilets: Four toilets, four hand basins, four showers plus a benched changing room
area.
Disabled toilets (2): Each with a toilet, hand basin and extractor fan.
Rear landing: Stairs to the upper and lower levels (with this being stairwell three).
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comGrey Street Landing: Stairs to the Grey Street entry foyer, door to the Bohemian Tattoo tenancy
and also the office space.
We note that the large number of toilets and showers provided in the common areas to this level is a
remnant of the former tenant of this level (with this being a gym). Although such a large amount of
ablution facilities is not usual, it is unlikely to be detrimental to the space now that they are
constructed.
Tauranga City Council Tenancy:
Office space: This area is currently set up in an open plan with the exception of internal
partitions surrounding the entry foyer. A kitchenette is situated near the
rear of the tenancy. There are also numerous columns within this area
(further comment is provided to Section 14.1 of this report).
Bohemian Tattoo Tenancy:
Tenancy: Door to the Grey Street landing, door to the rear common toilet area. One
partitioned office.
9.2.5 Description – Second Floor (Known as Level 2)
The second floor provides access to the lower levels, two landings, a common toilet and kitchen area
and currently three tenancies. One of these tenancies is vacant and has the potential for subdivision
into at least two tenancies.
Common Spaces:
Spring Street Landing: Stairs to the levels, lift entry, doors to the Property Managers Limited,
Cornell Institute and vacant tenancy.
Male Toilets: Two toilets, hand basins, extractor fans.
Female Toilets: Two toilets, hand basins, extractor fans.
Disabled toilet: A toilet, hand basin and extractor fan.
Rear landing: Stairs to the lower levels (with this being stairwell three).
Staffroom: Stainless steel sink bench, under bench and over head cupboard space,
hot water heater, door to the rear stairs.
Property Managers Limited Tenancy:
Office space: Double doors to the entry foyer, reception, meeting room, two partitioned
offices and an open plan area.
Cornell Institute Tenancy:
Reception: Double doors to the entry foyer.
Partitioned offices (4):
Class rooms (4):
Passage: Door to the rear common area.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comVacant Space:
Office space: Double doors to the landing, single door to the rear passage. Open plan
area.
9.2.6 Lessee Fitout/Improvements
Nil in terms of those items listed above.
We note that the lease list the following as lessee fittings:
- BNZ: Internal partitions, doors and ceilings, floor coverings, signage, shop front (including the
automatic opening door), toilets.
- The internal partitions within the Beauty of Plenty tenancy.
9.2.7 Lessor Fitout
Internal partitions, air conditioning and light fittings. Please note that the ground floor tenancies do not
have air conditioning. The level 1 and level 2 tenancies have an in ceiling integrated air conditioning
system.
We note that the lease list the following as lessor fittings:
- Ray White Commercial: Air conditioning and carpet.
- Spring Street Café: Shop frontage, ceiling, light fittings, fixed floor coverings, air conditioning.
- Ray White Residential: Air conditioning and carpet.
- Cornell: Partitioning and doors, carpet tiles, suspended ceiling, light fittings, air conditioning,
blinds, data unit and componentry, reception desk and shelving unit.
- Property managers Limited: Carpet tiles, air conditioning, internal partitioning, light fittings.
9.2.8 Building Condition
The building appears to be in generally good interior and exterior condition. Overall it provides above
average quality office and retail style accommodation, fittings and facilities. The building largely has the
appearance of modern construction and the glazed finished to the street frotnages of levels 1 and 2
provide a high end look to the building.
9.3 Earthquake Categorisation
On 10th May 2015 the Government announced major changes to the rules to assess and strengthen
buildings for earthquake risk. It proposes to adopt a “zone risk” assessment of earthquake prone
buildings throughout New Zealand.
The country will be split into low, medium and high seismic risk zones with respective timeframes for
assessment of 5, 10 and 15 years, and strengthening to be carried out within 15, 25 and 35 years.
Education and emergency buildings would be targeted, by requiring those in high and medium seismic
risk areas to be identified and strengthened in half the standard time. Schools, universities and
hospitals in high and medium risk areas would be upgraded more quickly, while buildings in low risk
areas could be assessed and strengthened more gradually.
Building owners would be encouraged to upgrade their buildings ahead of the allowable timeframe by
establishing a web-based public register and requiring notices on such buildings highlighting the level
of risk.
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Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comThere would also be a new requirement to strengthen earthquake-prone buildings when doing
substantial alterations.
Tauranga is identified in the medium risk zone which requires Tauranga City Council to complete their
assessment of earthquake prone buildings within the next 10 years and those buildings falling short of
the required 34% NBS would be required to be strengthened within 15 years after the end of the
assessment timeframe.
A Parliamentary select committee has considered the Bill with the proposed changes and reported
back to the Government in mid-2015. The Bill is to be known as the Building (Earthquake-prone
Buildings) Amendment Act and was initially expected to be passed in late 2015. However, we
understand that although it is now in it’s final stages, it is not now expected to become law until later in
2016.
9.4 Building Act 2004
The Building Act 2004 requires that all buildings which include certain specified systems must have a
Compliance Schedule and a Building Warrant of Fitness (BWOF). The Act requires the various
services and other facilities as set out in the Compliance Schedule to be inspected on a regular basis,
and the Warrant of Fitness to be renewed annually.
We have viewed a copy of the Building Warrant of Fitness Certificate and note that it expires on 14
May 2017.
9.5 Other Improvements
These include a shared hot mix sealed driveway to the rear of the site which is perpendicular to Grey
Street and a small sealed car parking area. The vast majority of the site though is covered by the
building.
Our valuation has been prepared on the basis of the improvements being located within the site
boundaries and constructed strictly in accordance with the recommended practices, and free from any
defect; unless otherwise stated within this report.
10.0 Tenancy Details
10.1 Introduction
We have been provided with the lease documentation. We note that the signed leases are all
Auckland District Law Society (ADLS) Leases. The Agreement to Leases (Property Managers
Limited, Bohemian Tattoo and BNZ) all provide for ADLS Leases. The main terms and conditions are
summarised below.
19
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2 Tenancy Summary
10.2.1 Beauty of Plenty
Landlord: Prime Investment Group
Tenant: Swang International Limited
The Premises: That part of the Lalldord's premises referred to as Shop E2,
Ground floor, 46 Spring Street, Tauranga comprising a floor area
of approxmately 53.77 m2.
Commencement Date: 1 June 2016
Term: Two years.
Rights of Renewal: Two of two years each.
Contract Rent: $12,000 per annum plus outgoings and GST
Rent Reviews: 1 May 2017 and two yearly thereafter
Rent Review Basis: Fixed reviews.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Beauty therapy services and retail and associated activities.
Outgoings: Outgoings recoverable from the tenant include:
Rates.
Utility charges, rubbish and recycling collection charges.
NZ Fire Service charges and maintenance charges in respect
of all fire detection and fire fighting equipment.
Building reinstatement insurance premiums and related
valuation fees and any insurance excess in respect of a claim
but not exceeding $2,000.
Contract charges for building services.
Maintenance of the premises and building services (but
excluding responsibility for structural repairs).
Provisioning of toilets.
Management expenses.
Costs of supplying an annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Clause 49 of the lease sets out that the rental shall increase to the
following levels:
1 May 2017 $13,000 plus GST
1 May 2019 $14,500 plus GST
1 May 2021 $16,000 plus GST
The tenant will at their cost add partition walls to divide the
tenancy into several consultation rooms, waiting and reception
areas.
The landlords fixtures are listed in the Fifth Schedule as including
kitchenette, hot water heater, fixed floor coverings, light fittings, air
conditioning, suspended ceiling.
20
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.2 Diamond Design
Landlord: Prime Investment Group
Tenant: Ashley Tulloch and Beverley Tulloch
The Premises: G23 State Insurance Arcade, Cnr Spring and Grey Streets,
Tauranga being the shop highlighted on the attached plan
(appendix D to this report).
Commencement Date: 1 October 2006
Term: Five years.
Rights of Renewal: Two of three years.
Contract Rent: $45,000 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date
Rent Review Basis: Market.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Retail
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish collection charges, NZ Fire
Service charges and maintenance charges in respect of all fire
detection and fire fighting equipment, building reinstatement
insurance premiums and related valuation fees and any
insurance excess in respect of a claim but not exceeding
$500, contract charges for building services, maintenance of
the premises and building services (but excluding
responsibility for structural repairs), provisioning of toilets,
grounds maintenance, yard and car parking area
maintenance, Body Corporate charges, management
expenses, costs of supplying an annual building warrant of
fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Sale of Business(Clause 48): This states that should the tenant
sell their business then the landlord agrees to this lease being
surrendered and they will enter into a new lease with the
purchaser.
21
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.3 Ray White Commercial
Landlord: Prime Investment Group
Tenant: Property Managers Realty Limited
The Premises: That part of the Landlords premises known as G21, G22 and G24,
State Insurance Arcade, 46 Spring Street, Tauranga.
Commencement Date: 1 March 2013
Term: Three years.
Rights of Renewal: Six of three years each.
Contract Rent: $50,000 per annum plus outgoings and GST
Rent Reviews: Upon renewal.
Rent Review Basis: Market.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Offices and administration
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish collection charges, NZ Fire
Service charges and maintenance charges in respect of all fire
detection and fire fighting equipment, any insurance excess in
respect of a claim but not exceeding $500, contract charges
for building services, maintenance of the premises and
building services (but excluding responsibility for structural
repairs), provisioning of toilets, costs of supplying an annual
building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Insurance premiums and related valuation fees.
Special Conditions: We note that there was a rent free period for the first three months
of the lease.
22
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.4 Blur Eyecare
Landlord: Prime Investment Group
Tenant: Blur Eyecare Limited (by Assignment)
The Premises: Shop G31, State Insurance Arcade, corner of Spring and Grey
Streets, Tauranga being approximately 100 m2.
Commencement Date: 1 November 2005
Term: Three years.
Rights of Renewal: One of three years each followed by a renewal until 18 March
2013, followed by three rights of renewal of two years each..
Contract Rent: $43,000 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date.
Rent Review Basis: Market.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Optometrist and allied activities.
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish collection charges, NZ Fire
Service charges and maintenance charges in respect of all fire
detection and fire fighting equipment, building reinstatement
insurance premiums and related valuation fees and any
insurance excess in respect of a claim but not exceeding
$500, contract charges for building services, maintenance of
the premises and building services (but excluding
responsibility for structural repairs), provisioning of toilets,
Body Corporate charges, management expenses, costs of
supplying an annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Not Applicable
23
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.5 Spring Street Cafe
Landlord: Prime Investment Group
Tenant: Taste Worx Limited
The Premises: That part of the Landlord's premises referred to as Shop G27, 46
Spring Street, Tauranga. In addition to this the tenancy comes up
with one open car park.
Commencement Date: 1 February 2013
Term: Three years.
Rights of Renewal: Three of three years each.
Contract Rent: $30,690 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date.
Rent Review Basis: CPI but capped at a maximum increase of 10% for a two year
period.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Coffee lounge and retailing of coffee, tea, accessories and
equipment.
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish and recycling collection
charges, NZ Fire Service charges and maintenance charges in
respect of all fire detection and fire fighting equipment, building
reinstatement insurance premiums and related valuation fees
and any insurance excess in respect of a claim but not
exceeding $2,000, contract charges for building services,
maintenance of the premises and building services (but
excluding responsibility for structural repairs), provisioning of
toilets, grounds maintenance, yard and car parking area
maintenance, costs of supplying an annual building warrant of
fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: The operating expense for the first two years of the lease shall be
fixed at $6,000.
24
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.6 Energy Bar
Landlord: Prime Investment Group
Tenant: Capella Limited
The Premises: Tenancy Shop G7.
Commencement Date: 18 May 2016
Term: One year.
Rights of Renewal: Three of two years each.
Contract Rent: $16,500 per annum plus outgoings and GST
Rent Reviews: Two yearly.
Rent Review Basis: CPI
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Personal training consultancy
Outgoings: Outgoings recoverable from the tenant include:
Rates.
Utility charges, rubbish and recycling collection charges.
NZ Fire Service charges and maintenance charges in respect
of all fire detection and fire fighting equipment.
Building reinstatement insurance premiums and related
valuation fees and any insurance excess in respect of a claim
but not exceeding $2,000.
Contract charges for building services.
Maintenance of the premises and building services (but
excluding responsibility for structural repairs).
Provisioning of toilets.
Grounds maintenance.
Yard and car parking area maintenance.
Body Corporate charges.
Management expenses.
Costs of supplying an annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: The landlord's fixtures are listed as including the ducted air
conditioning system, carpet and lighting.
The outgoings will be 2.47% of the building expenses and 8.13%
of the arcade expenses.
25
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.7 BNZ
Landlord: Prime Investment Group
Tenant: BNZ Branch Properties Limited
The Premises: That part of the Landlord's building at 46 Spring Street, Tauranga
shown outlined on the attached plan and having a rentable floor of
236.94 m2 and known as shops G29 and G30.
Commencement Date: 13 July 2015
Term: Eight years.
Rights of Renewal: Three of four years each.
Contract Rent: $128,500 per annum plus GST
Rent Reviews: Two yearly from the commencement date.
Rent Review Basis: Review to CPI, except on renewal where a market rental shall
apply.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the initial term of this lease.
Business Use: Retail and commercial banking, professional offices, commercial
offices and retailing and merchandising or such other use for
which the tenant may have obtained all necessary consents.
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish and recycling collection
charges, NZ Fire Service charges and maintenance charges in
respect of all fire detection and fire fighting equipment, building
reinstatement insurance premiums and related valuation fees
and any insurance excess in respect of a claim but not
exceeding $2,000, contract charges for building services,
maintenance of the premises and building services (but
excluding responsibility for structural repairs), provisioning of
toilets, grounds maintenance, yard and car parking area
maintenance, Body Corporate charges, costs of supplying an
annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Clause 49 provides the tenant with signage rights in return for an
annual payment of $2,000 per annum (non reviewable).
Clause 50 sets out a non competition clause in favour of the
tenant.
Clause 53 states that the building must maintain a minimum
seismic rating of 70% of the new build standard.
26
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.8 Langtons Lingerie
Landlord: Prime Investment Group
Tenant: M and D Wills Holdings Limited
The Premises: Approximately 103.3 m2 (plus a proportionate share of the
common area being 24.18m2) of the ground floor in the State
Arcade situated at 46 Spring Street, Tauranga
Commencement Date: 19 January 2007
Term: Five years.
Rights of Renewal: The lease was then renewed until 21 February 2015 and from this
date there is a five year term followed by a four year term.
Contract Rent: $42,500 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date.
Rent Review Basis: Market.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Retail apparel and associated items
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish collection charges, NZ Fire
Service charges and maintenance charges in respect of all fire
detection and fire fighting equipment, building reinstatement
insurance premiums and related valuation fees and any
insurance excess in respect of a claim but not exceeding
$500, contract charges, maintenance of the premises and
building services (but excluding responsibility for structural
repairs), provisioning of toilets, grounds maintenance, yard
and car parking area maintenance, management expenses,
costs of supplying an annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: The tenant shall have the right to terminate the lease on 19
February 2015 by giving a minimum of 6 months prior written
notice to the landlord.
27
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.9 Tauranga City Council
Landlord: Prime Investment Group
Tenant: Tauranga City Council
The Premises: Level 1 of the building as outlined on the plan attached to the
lease. In addition two covered car parks on site are provided and
a space for a generator in tn the garage of the ground floor..
Commencement Date: 1 March 2016
Term: Four years.
Rights of Renewal: One of one year.
Contract Rent: $198,440 per annum plus outgoings and GST
Rent Reviews: Annually
Rent Review Basis: Fixed rent reviews for the office and to market for the car parks
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Office and associated council uses.
Outgoings: Outgoings recoverable from the tenant include:
Rates.
Utility charges, rubbish and recycling collection charges.
NZ Fire Service charges and maintenance charges in respect
of all fire detection and fire fighting equipment.
Building reinstatement insurance premiums and related
valuation fees and any insurance excess in respect of a claim
but not exceeding $2,000.
Contract charges for building services.
Maintenance of the premises and building services (but
excluding responsibility for structural repairs).
Provisioning of toilets.
Grounds maintenance.
Yard and car parking area maintenance.
Body Corporate charges.
Management expenses.
Costs of supplying an annual building warrant of fitness.
Unrecovered outgoings include:
Structural repairs and maintenance
Special Conditions: Generator: The generator is owned 50% each by TCC and the
Landlord.
28
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.10 Bohemian Tattoo
Landlord: Prime Investment Group
Tenant: Bohemian Tattoo Arts Limited
The Premises: Tenancy C, Level 1, 46 Spring Street, Tauranga
Commencement Date: 4 June 2015
Term: Six years.
Rights of Renewal: Nil
Contract Rent: $35,525 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date
Rent Review Basis: There is a set rental increase 18 months after the commencement
date taking the rental to $38,570. Thereafter to CPI based
adjustments.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Tattoo studio and offices
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, rubbish and recycling collection
charges, NZ Fire Service charges and maintenance charges in
respect of all fire detection and fire fighting equipment, building
reinstatement insurance premiums and related valuation fees
and any insurance excess in respect of a claim but not
exceeding $2,000, contract charges for building services,
maintenance of the premises and building services (but
excluding responsibility for structural repairs), provisioning of
toilets, grounds maintenance, yard and car parking area
maintenance, Body Corporate charges, management
expenses, costs of supplying an annual building warrant of
fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Not Applicable
29
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.11 Cornell Institute
Landlord: Prime Investment Group
Tenant: Cornell Institute of Business and Technology Limited
The Premises: That part of the Landlord's premises known as Suite 2, Level 2, 46
Spring Street, Tauranga comprsing a floor area of approximately
314 m2 (which includes a proportionate share of the common area
on Level 2).
Commencement Date: 12 January 2015
Term: Two years
Rights of Renewal: One of two years.
Contract Rent: $55,000 per annum plus GST
Rent Reviews: Upon renewal
Rent Review Basis: On 12/1/2016 the rental will be increased to $60,000. The next
review shall be to market.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Training rooms and commercial offices
Outgoings: Outgoings recoverable from the tenant include:
Cleaning costs of the common area
Proportionate share of lift servicing costs.
Unrecovered outgoings include:
Structural repairs and maintenance.
In addition the landlord shall pay rates, utility charges, rubbish
and recycling collection charges, NZ Fire Service charges and
maintenance charges in respect of all fire detection and fire
fighting equipment, building reinstatement insurance
premiums and related valuation fees and any insurance
excess in respect of a claim, contract charges for building
services, maintenance of the premises and building services
(but excluding responsibility for structural repairs), provisioning
of toilets, grounds maintenance, yard and car parking area
maintenance, Body Corporate charges, management
expenses, costs of supplying an annual building warrant of
fitness.
Special Conditions: Not Applicable
30
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.2.12 Property Managers
Landlord: Prime Investment Group
Tenant: Property Managers Limited
The Premises: All that part of the Landlord's property on Level 2, 46 Spring
Street, Tauranga shown as Tenancy 1 comprising 162 m2 plus a
proportionate shaore of the common areas being 30 m2.
Commencement Date: 1 April 2015
Term: Three years.
Rights of Renewal: Three of three years each.
Contract Rent: $34,560 per annum plus outgoings and GST
Rent Reviews: Two yearly from the commencement date.
Rent Review Basis: CPI.
Ratchet Clause: The rental on review shall not be less than the annual rent payable
as at the commencement date of the then current lease term.
Business Use: Professional Offices
Outgoings: Outgoings recoverable from the tenant include:
Rates, utility charges, NZ Fire Service charges and
maintenance charges in respect of all fire detection and fire
fighting equipment, building reinstatement insurance
premiums and related valuation fees and any insurance
excess in respect of a claim but not exceeding $2,000,
contract charges for building services, maintenance of the
premises and building services (but excluding responsibility for
structural repairs), provisioning of toilets, grounds
maintenance, costs of supplying an annual building warrant of
fitness.
Unrecovered outgoings include:
Structural repairs and maintenance.
Special Conditions: Not Applicable
31
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com10.3 Tenancy Schedule
Contract Rent Analysis
Tenant Lease Rentable Area Premises Carpark Other Passing
Type Area Rate Rent Rent Rent Rent
2 2
(m ) ($/m )
Energy Bar Net 107.7 $153.16 $16,500 $0 $0 $16,500
Spring Street Cafe Net 213.0 $139.20 $29,650 $1,040 $0 $30,690
Diamond Design Net 126.2 $356.63 $45,000 $0 $0 $45,000
Blur Eyecare Net 110.4 $389.42 $43,000 $0 $0 $43,000
BNZ Net 293.0 $431.78 $126,500 $0 $2,000 $128,500
Ray White Commercial Part Gross 380.8 $131.30 $50,000 $0 $0 $50,000
Langtons Lingerie Net 128.6 $330.51 $42,500 $0 $0 $42,500
Bohemian Tattoo Net 238.4 $156.00 $37,188 $0 $0 $37,188
Cornell Institute Gross 325.3 $184.46 $60,000 $0 $0 $60,000
Property Managers Limited Net 197.8 $174.73 $34,560 $0 $0 $34,560
Beauty of Plenty Net 61.8 $194.11 $12,000 $0 $0 $12,000
Level 2 Vacant Tenancy Net 280.7 $0.00 $0 $0 $0 $0
Tauranga City Council Net 1,088.0 $180.00 $195,840 $2,600 $0 $198,440
10.4 Weighted Average Lease Term
We have calculated the Weighted Average Lease Term (or WALT) of the leased tenancies at the
subject property at 42 months (or around 3.5 years). This is considered within what would normally
be expected for a property of this character. Our workings are shown in the table below:
Tenant Lease term remaining Net Rent %age
Beauty of Plenty 23 months $ 12,000 2% 0.41
Diamond Design 15 months $ 45,000 7% 1.00
Ray White Commercial 32 months $ 50,000 * 7% 2.36
Blur Eyecare 6 months $ 43,000 6% 0.38
Spring Street Cafe 31 months $ 30,690 5% 1.41
Energy Bar 8 months $ 16,500 2% 0.20
BNZ 84 months $ 128,500 19% 15.95
Langtons Lingerie 43 months $ 42,500 6% 2.70
Tauranga City Council 44 months $ 198,440 29% 12.90
Bohemian Tattoo 59 months $ 37,180 5% 3.24
Cornell Institute 6 months $ 38,530 * 6% 0.34
Property Managers Limited 21 months $ 34,560 5% 1.07
WALT 42 months $ 676,900 100% 41.95
* Estimated net rental
32
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.com11.0 Operating Expenses
We have been advised of the following level of operating expenses (or OPEX) for the property. These
figures have been provided to us by Property Managers Limited and we have relied on these as being
accurate for the current year:
Operating Expenses (OPEX)
2
Budgeted $/m of Rentable
Item % of Total
Amount Area
Rates $41,145 $11.58 18.5%
Water rates $3,000 $0.84 1.4%
Building Insurance $19,670 $5.54 8.9%
Electricity Common areas $40,830 $11.50 18.4%
Repairs and Maintenance $6,900 $1.94 3.1%
Electrical other $3,800 $1.07 1.7%
Plumbing $3,400 $0.96 1.5%
Lift Maintenance Charges $12,960 $3.65 5.8%
Air conditioning $17,000 $4.79 7.7%
Fire monitoring etc $10,320 $2.91 4.7%
Grounds maintenance $600 $0.17 0.3%
Cleaning Charges $31,545 $8.88 14.2%
Security $3,300 $0.93 1.5%
Building WOF $2,000 $0.56 0.9%
Management Expenses $19,050 $5.36 8.6%
Miscellaneous $6,340 $1.79 2.9%
Total $221,860 $62.47 100.0%
The above figures are exclusive of GST. We consider that these are at the high end of the OPEX in
the Tauranga CBD. However, it is more or less at the expected level given the facilities provided at
the building.
33
Our Ref: TAU-83270
++ Local Knowledge, National Coverage 46 Spring Street, CBD, Tauranga telferyoung.comYou can also read
