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Karaka landbank opportunity with holding income

The 2.46ha site with boundaries to Dyke and Linwood roads, five minutes from the Southern Motorway interchange, was formerly home to the popular wedding and hospitality venue St Margaret’s Café, which ceased trading post-pandemic.

The subject property at 6 Dyke Road has extensive exposure to a main arterial route, and features buildings totalling 337.64sqm including a cottage, offices, commercial kitchen, café, covered walkways and carport set within established gardens.

It is currently occupied by real estate investment and development company Citadel Capital, with a three-year lease from May 2022 returning net annual income of $180,000 plus GST.

Citadel development entity Fortland is understood to be pursuing a private plan change for a large parcel of land in the immediate area, seeking rezoning to Countryside Living and is using the former hospitality venue premises as its showroom with associated offices and on-site café.

The Dyke Road property is now surplus to the requirements of its motivated local investor owner and will be auctioned on Tuesday 16th August with Bayleys.

Located across from a consented 800-lot residential development, commercial centre and proposed supermarket, Shane Snijder of Bayleys Pukekohe said the landholding represents huge future upside for a forward-thinking buyer as large developable sites in prime locations are increasingly difficult to find.

“With swathes of South Auckland identified and earmarked for future growth under the Auckland Unitary Plan, the Karaka North precinct is expected to provide for the integrated development of a new, rural village settlement,” he said.

“This is to be centred at the intersection of Dyke, Blackbridge and Linwood roads and will offer retail, service and community facilities, along with extensive residential accommodation from traditional to medium density options.

“Karaka has a well-established rural community, but the new village will be a focal point and proactive developers are scoping out opportunities.”

Snijder said the subject property presents buyers with a host of options given the favourable underlying zoning, and is located directly opposite the Karaka Sports Complex, which is to be expanded and upgraded.

“The portion of the property nearest the junction of Dyke and Linwood roads is zoned Business – Local Centre, with the remainder zoned Residential – Mixed Housing Suburban.

“It presents a great landbank opportunity, and with the development precedent now set in the area, a new owner will benefit from the holding income through until mid-2025 while facilitating plans for a better and higher use of a site of this scale.

“They could essentially sit tight and leverage the work that is being done in the immediate area as other developers proceed with subdivisions and associated necessary infrastructure, while quietly working away in the background to bring new ideas to life in three years’ time.”

Snijder said there is currently a shortage of favourably-zoned land in Karaka and the commercially-zoned portion of the subject property leaves the door open to reinstating a wedding venue or other hospitality/accommodation use.

“Buyers seeking reassurance of the area’s fundamentals need only look at the escalating pipeline of new developments to see the depth of investment that is occurring in this emerging Auckland regional growth node,” he said.

“Nearby, the 256ha Kingseat mixed-use development will have residential, commercial and industrial components, and will offer additional job opportunities for this traditionally-rural-based economy.

“Other major residential developments in the pipeline or underway in the wider area include Karaka North Village which is a proposed masterplanned housing development with community facilities and commercial centre; Pareata Rise offering around 4,500 new homes within a master-planned community; and Auranga in Bremner Road with close to 1,000 new homes.

“Plus, there are smaller residential developments progressing in Glenbrook, Glenbrook Beach, Patumahoe, Waiau Pa, and in Pukekohe.”

Meanwhile, Stevenson Group’s ambitious Drury South Crossing development which promises to deliver a world-class industrial, logistics, manufacturing, commercial and residential hub for the area, and the retail precinct proposed by Kiwi Property, Oyster Capital and Fulton Hogan in Drury also add weight to the area’s credentials.

Click here for more information on the listing.

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