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A fast-paced and modern coffee shop in the heart of Auckland’s central business district is on the market for sale – offering property investors the opportunity to add a new ‘mix’ to their asset portfolio.
The Esquires Coffee shop at the base of the Metropolis building in Courthouse Lane is a high-profile café with extensive corner frontage overlooking Chancery Square, and benefitting from high foot traffic volume on a daily basis.
The 158 square metre shop generates a net income of $80,000 per annum. The 40-storey Metropolis tower was built in the late 1990s and contains a mixture of retail outlets throughout its ground floors, with hotel rooms and privately-owned apartments above. In its early days, Metropolis was considered to be one of Auckland's most exclusive apartment buildings.
With a large outdoor courtyard covered enabling al-fresco seating, the shop is leased to an Esquires Coffee franchise operation under a 12-year lease running until 2022, with a further 12 year right of renewal. Rent is reviewed every two years and is linked to the Consumer Price Index.
The freehold shop – but not the business – is being sold by Bayleys Real Estate through an auction being held on December 7. Bayleys senior sale person James Chan said the unit offered the right ‘blend’ of investment fundamentals - with a high quality fit out in a busy location, a branded tenant, and a long lease in place.
“From a location perspective, this site is smack in the middle of Auckland’s CBD – surrounded by some of the city’s biggest office blocks immediately adjacent to thousands of apartments, and in the heart of the city’s boutique retail sector stretching from Chancery Lane across High Street and into Vulcan Lane,” Mr Chan said.
“The subsequent affluent customer mix ensures Esquires attracts a corporate clientele during the weekdays, and a residential and shopper clientele on weekends. On top of this, Esquires is a national brand with an incredible business support network underpinning its long-term sustainability and growth.
“The fit out of the Courthouse Lane premises is a mix of trendy clean-lined functional furnishings offering lounge and bar-leaner type seating and tables, with a slick foodservice preparation and front-of-house counter areas.”
The Esquires coffee shop brand was introduced to New Zealand in 2004 and now has some 49 stores nationwide. The brand was established, and has subsequently grown, not only on the basis of its quality coffee blends, but also the atmosphere and ambience created within its locations.
Franchisees signing up to the Esquires brand are required to deliver customers free WiFi wireless internet, install large plasma screen TVs to play news and music videos, and provide current consumer magazines and newspapers.
“The quality of coffee service in New Zealand has gone from what was an ‘instant brew’ mentality as recently as the 1980s, to now being among some of the best in the world,” Mr Chan said.
“New Zealand baristas regularly compete at world competitions, and the range of styles and choices available is as good as anywhere in Europe or South America. This is one of the reasons why some of the generic multi-national brands have struggled to gain a foothold in New Zealand’s domestic retail coffee market.
“Conversely, brands such as Esquires which have embraced New Zealand’s appreciation for good coffee, and combined that with international design flair when fitting out their locations, have led the market. The Courthouse Lane operation is evidence of this philosophy.”
Mr Chan said the Courthouse Lane premises would ideally suit a passive property investor looking for a low-risk opportunity.