An Otahuhu industrial property displaying many of the attributes of a secure, passive investment, is expected to attract buy-and-hold investors, like family trusts, high net-worth individuals and property syndicates.
The 1.4ha property at 21 Huia Rd, being marketed by Hamish West and Paul Higgins of Colliers International, is for sale by deadline private treaty closing at 4pm on Wednesday, October 31, unless it sells beforehand.
It is leased to arboriculture and tree maintenance firm Treescape, which holds contracts with councils, major power networks, construction companies, government agencies, developers and other customers in Australia and New Zealand.
Treescape has leased the property for a new eight-year term dating from July 2012.
Three lease renewal terms of five years each are available to Treescape, giving the potential to extend the initial eight-year term. The annual net rent of $357,100 is reviewed to market every two years, giving potential future income growth.
"This property has excellent investment fundamentals including an international tenant on a long lease," West says. "It also has a good income stream and is low maintenance, being made up of a relatively small building component and a very large yard."
Higgins says the offering comprises a level, regular-shaped Business 5-zoned site, with a 1625sq m office and warehouse building offering functional and modern industrial accommodation. "The clear-span warehouse is of tilt slab construction and has two 6m high automatic roller doors and a high stud of 7.5m at the portal knee."
Offices and staff amenities over two levels are positioned at the front of the building, providing both open plan and partitioned office areas. The site also provides off-street car parking and drive-around truck access.
Two of Treescape's founding directors have had a majority ownership of the site since 2003 and base their head office and main working yard at 21 Huia Rd, says Higgins. "The New Zealand-owned and operated company has been in business for more than 30 years and today employs over 400 trained staff covering the entire country as well as operating in Australia."
Huia Rd is between Great South Rd and Saleyards Rd in Otahuhu, an established suburb of south-east Auckland which incorporates industrial and residential areas.
"This part of Otahuhu is a long-established industrial precinct which continues to prove a popular location for small to medium-sized businesses, which appreciate being close to main arterial transport routes," West says.
Well-known national and international brands that have recently set up distribution centres in Otahuhu, including L'Oreal, Fonterra, Supercheap Auto, Konica Minolta and USG.
The property is just off Great South Rd and only 1km from the Princes St interchange to the SH1 motorway, allowing road access to the Auckland central business district to the north and Auckland International Airport to the south in around 20 minutes each-way.
"This access means this part of Otahuhu is closer to the motorway than many other industrial areas in Auckland, and substantially enhances attraction of the industrial area for workers, customers and transport providers," says West.
The sale comes as Colliers latest quarterly confidence survey reveals investor confidence in Auckland's industrial property market is high.
Alan McMahon, Colliers national director of consulting and research, says 36 per cent of Auckland respondents forecast improving conditions for industrial property investors over the next year.
"This net 36 per cent optimism in the Auckland industrial market is slightly down on the net 41 per cent recorded a year ago.
"However, it is still the highest level of optimism of any of the sectors and shows robust improvement from only five per cent optimism two years ago."
Auckland industrial vacancy remains unchanged at 5.1 per cent over the year to August 2012, according to Colliers Research.