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His retail shop A01 in the Chancery Square is empty again. Tenants come and go. It was Freeway clothing, then Video Source (a video rental store in an upmarket retail area?) for only few months, and now it's empty again.
True but now I've managed to read the linked article I tend to see BJs point. Another successful cafe owner says they can make money at that rent level. Also, the ex cafe owner talks about empty retail spaces on Customhouse Quay that are empty and suggests that this is because the rent is too high. They obviously don't understand commercial property, those shops are empty because they are in really bad locations, you probably couldn't give them away. The only shop that could survive in those locations would have to be a specialist shop in a niche market.
Definitely a number of vacancies going up around Featherston Street in the last few months close to where this cafe was located. Would be interesting to see what the rent is on a sqm basis as it wasn't a small cafe.
- Bought for $45m + minor renovation/addition (throw in any number, say 1m) = $46m
- 17,357 sqm NLA, plus 4-level annex (say 900sqm x 4= 3,600sqm.) = 21,000sqm.
Say JB likes to have 10% cap rate.
4,600,000/21,000 = 219/sqm net rent required.
With his experience in purchasing Forsyth Barr Tower at 55 Shortland St a while ago, getting this minimum rent for BJ is no problem at all. I think it's a very good deal for BJ in the long term, despite the short term vacancy he will be facing.
The new cafe on this site just opened this last week. Its about 70% complete according to the new owner when I dropped in yesterday. A bit of an Americana thing going on with burgers and mexican influence. Very tasty but rather small portions. The new owner is the former manager of Gotham cafe in Chews Lane. Good luck to them.
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