A high-profile retail investment located in Launceston Tasmania, spanning an approximate land size of 3,230 sqm. The site features modern premises with strong income growth potential and excellent exposure to approximately 20,000 vehicle movements per day. The area is set for strong population growth, supported by nearby infrastructure investment, and this opportunity comes with multiple potential strategies to capitalise on that growth. <br><br>The property comprises a single-storey mixed-use building with a lettable area of approximately 1,575 sqm. It includes two tenancies – a ‘Shiploads’ showroom (1,212 sqm) and a Zap Fitness gym (363 sqm). The premises feature high ceilings, LED lighting, and an invaluable 42 on-site car spaces with loading facilities. Constructed circa 1990 and upgraded in 2006 and 2013/14, the building is low maintenance with modern finishes.<br><br>Fully leased, the property generates a net annual income of approximately $484,514, equating to a net return of 6.58% (from 1/2/25). The Weighted Average Lease Expiry (WALE) is 2.86 years. This will ensuring consistent income flow, whilst exploring promising strategies to generate upside in the value of the asset. <br><br>• Shiploads: Lease expiring 1 February 2027, current net rent of $350,000 p.a. with 3% fixed annual increases. Shiploads will be exiting the building upon lease expiry, providing multiple strategy options to the purchaser. <br><br>• Zap Fitness: Lease term extended to 31 January 2028, current net rent of $143,264 p.a., with rent reviews at the greater of 3% or CPI. Zap’s intention appears to be to extend their term, and potentially take up a larger foot print, if available. <br>Both tenants reimburse majority of the outgoings, contributing to the asset's stability and minimal management overhead.<br><br>Area Details <br><br>Situated in Mowbray’s bustling retail precinct, just 4 km from Launceston CBD, the property benefits from proximity to major retailers including Coles, Woolworths, Target, and fast-food outlets like Hungry Jack’s and KFC. The area is further supported by key amenities such as the University of Tasmania – Newnham Campus and Mowbray Medical Centre. The area is set to experience strong growth, with a pending nearby major subdivision as part of Launceston’s key growth corridor. Mowbray is also set to benefit from a major infrastructure project which will attract more residents. <br><br>With a population around 100,000 people, Launceston is one of the larger regional cities in Australia.<br><br><b><u>Upside strategies</u></b><br><br>The key highlight of this opportunity is the multiple uplift strategies that can be used, which are supported by the premium retail positioning of the asset, the shorter WALE of around 2.8 years, and expected population growth in the surrounding area. A few example strategies that could be explored include:<br><br>One) It is known to Rethink that Zap Fitness have expressed an interest in increasing their footprint to around 600m2. It is also known that multiple ‘Large Format Retail’ tenants have enquired about leasing around 600m2 also, including a leading national auto parts retailer. Both tenants could potentially take up the existing Shiploads footprint (in around 2 years’ time), with Zap’s existing smaller tenancy filled by another tenant. Given the current Shiploads tenant is paying below market rent, this has the potential to generate a rental increase in 2 years time. Estimates indicate potential upside rent of circa $36,000 (conservatively based on today’s market rent of around $320/m2), which equates to a capital uplift of around $606,000 (based on a 6% cap rate which is likely conservative).<br><br>A second part of this strategy could be strata titling the three tenancies (STCA) providing multiple exit strategies, helping to unlock significant upside. Retail assets with smaller floor plates sell at tighter net yields (than the 6.58% available on this asset), generally at 6% or under. Taking into account expected interest rate drops, a very conservative net yield of 5.75% averaged across the entire asset, and increased total income in 2 years time, the asset could have a total sales value around $9,362,000 plus (estimate only).<br><br>Two) It is also known that multiple Childcare operators have expressed an interest in occupying the site. One particular significant national operator is understood to have serious interest in partnering with an investor/developer, to occupy the site. Given the strength of the growing location, and access to car parking, this strategy has potential to add significant value to the asset. Childcare assets come with long and secure leases, and sell at sharp yields in Tasmania.<br><br>Three) A third strategy would be to attempt to secure one large national Large Format Retailer for the site. The viability of this option would further strengthen as the local population grows, providing a more medium term opportunity. A prominent national retailer tenant with long lease would also have potential to add significant value to the asset.<br>