Tauranga service station powers passive income

A high-profile, fully tenanted service station investment in one of New Zealand’s fastest-growing regional cities is being brought to market, offering investors a rare opportunity to secure passive income underpinned by essential service demand and long-term land value fundamentals, Bayleys brokers say.

Bayleys Tauranga’s Rory Brown, together with colleague James Hill, is marketing the freehold property at 18-22 Fifteenth Avenue for sale by deadline, closing at 4:00 pm on Thursday, 21st May 2026 (unless sold prior).

The offering comprises a 2,015sqm (more or less) landholding across three titles, fully leased to Z Energy and returning a net annual income of $182,657 plus GST and outgoings. The lease structure provides built-in rental growth through fixed annual increases and periodic market reviews, delivering a stable and low-touch investment profile.

Brown says the asset sits at the intersection of two powerful investment themes: the resilience of essential services and the strategic value of well-located urban land.

“Service stations have consistently demonstrated their defensive characteristics, but in the current environment, that resilience has come into sharper focus,” he says.

“Recent geopolitical tensions and energy supply disruptions have reinforced how critical fuel infrastructure remains to daily economic activity. Diesel, in particular, continues to underpin logistics, transport and primary industry, meaning demand is not discretionary – it is fundamental.”

The property occupies a prominent corner position at the intersection of Fifteenth Avenue and Mayfair Street, a key arterial route linking Welcome Bay with Cameron Road and the wider Tauranga network. With exposure to approximately 20,000 vehicle movements per day and additional rear access via Burrows Street, the site benefits from strong visibility, efficient circulation and multiple access points.

Brown says prominent arterial sites of this nature are increasingly scarce, and as Tauranga grows, locations like the subject property become more strategic – underpinning the investment with enduring land value.

“High-traffic arterial sites with easy access and strong profiles are tightly held for good reason. They support existing use today, while occupying key locations that adapt as cities grow and land use intensifies.

“That gives investors confidence they’re not just buying income; they’re securing a strategic foothold within Tauranga’s urban footprint.”

The tenant, Z Energy, operates the site under its U Go self-service brand and has recently renewed its lease through to December 2028, with six further rights of renewal extending the potential final expiry to 2052.

Bayleys Commercial and Industrial Sales and Leasing broker James Hill says the covenant strength and lease profile will appeal to investors seeking durability of income.

“A nationally recognised tenant with a long operating history provides confidence, but it’s the combination of that covenant with structured rental growth that elevates this investment,” he says.

“You’re acquiring an asset that not only delivers income today, while retaining flexibility for the future – whether that’s continued passive hold, or repositioning over time as the surrounding area evolves.”

Beyond the immediate income profile, the property is positioned within Tauranga’s broader growth trajectory. As one of New Zealand’s fastest-expanding urban centres, the city continues to benefit from strong population growth, infrastructure investment, and its role as a key logistics and export hub anchored by the Port of Tauranga.

Hill says this growth is translating into demand for service-based commercial assets, particularly those occupying key transport corridors with future adaptability.

“As Tauranga expands, arterial routes such as Fifteenth Avenue become increasingly important connectors throughout the city,” he says.

“Assets that sit directly on these routes, particularly those providing essential services, are uniquely positioned to capture that growth.”

With its combination of scale, profile, secure income and long-term relevance, 18-22 Fifteenth Avenue presents a compelling opportunity for investors seeking exposure to a resilient asset class in a high-growth regional market.