Two big Otahuhu industrial properties in Salesyard Rd and Weka St are being offered for sale by tender as part of Bayleys' latest Total Property portfolio.
The Rowbotham Group, one of New Zealand's largest importers, is selling its substantial property housing subsidiaries to free up capital for expansion internationally.
The property, at 22 Saleyards Rd, is one of three Auckland properties the group occupies. Wholly owned subsidiary Surplus Brokers, which operates the large distribution facility and retail showroom on the 1.94ha site, will take a 12-year lease when the sale is completed at an initial net annual rental income of $746,200. The leaseback includes fixed annual rent increases of three per cent, with a four-year rent review when the increase will either be to market or another 3 per cent, whichever is greater.
The property is being marketed for tender closing September 20, through John Halstead of Bayleys Auckland and Geoff Wyatt of Bayleys Manukau.
The Rowbotham Group imports inventory lines from Asia sold through its own auctions and internet sales via Trade Me and Savebarn websites throughout Australasia. Savebarn also wholesales products to New Zealand's larger bulk retailers.
The Saleyards Rd property comprises a substantial storage and warehouse complex with stud heights ranging up to 5.5 metres. The main warehouse and air conditioned office areas are 4164 sq m and 742 sq m respectively and there is another 384 sq m of older office space. The complex also includes a retail showroom of 828 sq m and low stud and mezzanine storage space of 620 sq m. A substantial yard and car parking are situated at the front and alongside the main building, with a hardstand area of approximately 2400 sq m.
Halstead says the property has the added benefit of development potential given the buildings on the large freehold flat site cover approximately only one third of the land area.
"That leaves ample room for future expansion of the existing building in conjunction with the tenant or redevelopment of the vacant land area."
Also for sale in Otahuhu's industrial precinct is nearly a hectare of land with all four buildings on the freehold site almost fully leased.
The 9789 square metre site at 20 Weka St has about 5700 square metres of lettable space including a 10-unit main warehouse and office block, another standalone warehouse plus a mechanical workshop.
The property is also being sold by tender through Mark Pittaway and Colin McKenna of Bayleys Auckland closing on September 27 unless sold prior to that date. Pittaway says the site has a land value of between $250 and $300 per sq m, which has the potential to represent a significant portion of the total value of the property while returning annual rental income of $342,105 plus GST and outgoings. The main building containing the 10 industrial units is 4850 sq m and there is an adjoining 352 sq m office building. The other warehouse is 370 sq m in area, while the workshop is 128 sq m.
"This property is typical of the older-style large industrial properties in some of Auckland's longest established areas which have been converted into a complex of smaller industrial warehousing units," Pittaway says. "The vendors have spent a considerable amount of money upgrading the yard space as well as the main building which is high stud, with a concrete roof."
The buildings have been divided into 12 tenancies, only one of them vacant. Pittaway says the tenancy mix is stable and tenants include companies associated with an adjoining manufacturing site and one of Auckland's largest ethnic food suppliers.
He says the property is owned by a partnership of three investors who want to divest to concentrate on their individual interests and is likely to be sold at a double figure yield.
"There is room for rental growth by reconfiguring the tenant layout to maximise lettable area, realigning the tenancy schedule to market rates and by leasing up the remaining vacant space.
"In the long term, this is a big site with redevelopment potential within Otahuhu's long-established industrial precinct which continues to prove a popular location for smaller to medium sized businesses in particular.