A huge industrial complex in an ideal Auckland position makes a strong business proposition with the chance to boost income even more.
A 4.4-hectare property fully leased to two multinational companies and claimed to be "the biggest developed industrial land holding to be placed on the market in the Mt Wellington area in several years" is being offered for sale or lease.
The huge complex, with a gross lettable floor area of nearly 30,000sq m at 100 Carbine Rd, Mt Wellington, is featured in Colliers International's latest National Portfolio publication launched yesterday.
Marketed by Greg Goldfinch, Brad Johnston and Hamish West of Colliers International on behalf of Norak Properties, the property is for sale by deadline private treaty closing on September 19. A leasing campaign is being run in conjunction with the sale process and is ongoing.
Goldfinch says there is the possibility that larger owner occupiers or tenants could move into part of the facility as early as December even though the property is fully leased,
"Large sites like this, with income streams in Auckland's central industrial area, only come on to the open market very rarely," he said. "There are very few large-footprint warehouse and office facilities being offered to the market in Mt Wellington, whether it be to owners or tenants.
"The fact that there is next to no greenfield land available for development in Mt Wellington and Penrose makes this Business 5-zoned property even more attractive as an investment proposition, particularly given the very strong underlying land values in this prime area."
Goldfinch says he expects the property to also be of interest to buyers with longer term add-value options in mind, with the existing leases providing holding income for up to five years.
"The property will be attractive to a wide range of parties, including owner occupiers, tenants, developers and add-value investors, owing to its size and excellent location," he said.
Johnston says the two corporate tenants, Aperio Group (NZ) Ltd and VisyPet NZ Ltd, provide high-quality tenant covenants that effectively "split the risk" of future investment returns and give flexibility to the new owner.
"Rent-review clauses give the potential for future income growth and, while the property easily accommodates two big tenants at present, it could quite easily be reconfigured to house one large occupier."
Aperio is a packaging company with six plants in Australia, four in New Zealand and one in Thailand. It is now part of Amcor, the world's largest packaging company, following a recent acquisition.
The company's Carbine Rd operations specialise in blown film extrusion for the production of food packaging, as well as applications in the agriculture, horticulture and industrial segments.
Aperio occupies 11,300sq m of floor area paying just over $1 million in net annual rental income on a 10-year lease expiring in January 2014, if the rights of renewal extending the lease for two further terms of five years each are exercised.
Visy was established in 1948 in Australia and operates more than 120 sites in Australia, New Zealand and Asia. It is the world's largest privately owned packaging and recycling company, and focuses on sustainable packaging. The company's Carbine Rd facility produces PET packaging, including plastic bottles.
VisyPet NZ pays $1.68 million in annual net rent for its 17,965sq m facility. The lease expires in October 2017, with a right to renew for a further six years.
The property houses various office and warehouse buildings, with the older warehouses constructed in the 1960s.
Johnston says both the older and newer warehouses provide high stud, clear span accommodation.
"The older facilities are very useable with features such as multiple roller doors and canopies," he said. "Recent warehouse extensions have also been added, while retaining the large hardstand yard areas which make this property extremely functional for modern occupiers."
There are three street access points from Carbine Rd, Gabador Place and Bowden Rd, which enhance accessibility for deliveries and goods deployment.
"There is very good truck access throughout the property as well as ample container drop areas," Johnston said.
Aperio's portion of the property features ground and first-floor offices with a covered walkway leading to the main warehouse/factory. The warehouse is split into several areas for various processes such as storage, extrusion and printing.
All areas are interconnecting and offer clear, uninterrupted warehouse and factory space, with stud heights varying from six metres at the lowest point, rising to 12.8 metres.
A two-tonne gantry crane and five roller doors on three sides of the warehouse provide easy loading and unloading to the older warehouse.
A high-stud warehouse extension was completed at the rear of the main factory in 2004, which is in excellent condition, says West. Access to the new portion of the warehouse is via four roller doors on the northern side which open to a canopied hardstand yard, with direct access to Bowden Road via electric gates.
Visy occupies ground-floor offices arranged around a courtyard, and a main factory/warehouse accessed off Carbine Road with secure yards. Access is provided via three roller doors on the southern side plus two additional doors on the eastern side of the warehouse, which features a stud height of seven metres at the knee rising to 10 metres at the apex.
West says a warehouse extension has been recently completed to the rear of Visy's older facility and its part of the property offers a massive yard and plenty of parking.
He says 100 Carbine Rd property is very close to Mt Wellington Highway which leads to the nearby on and off ramps of the State Highway One. From an employee perspective it is also only a short distance from the shops and cafes of the Sylvia Park commercial hub.
"Mt Wellington is considered one of Auckland's premier industrial areas with the Auckland CBD only 12 minutes' drive away," West said. "The area is popular among multi-national and national industrial occupiers and, as a result, commands some of the top industrial rentals in the Auckland market.
"It's also in demand from importers and distributors due to its central location halfway between Auckland's CBD, Ports of Auckland and Auckland International Airport."
Goldfinch says the Carbine Rd complex is situated within a very tightly held area with a short supply of properties: "Industrial properties coming on to the market in this area generally get snapped up very quickly."
He says land values reflect the appeal of the area, with values at $350 to $400 per square metre at the moment, and cites recent research from Colliers International showing prime capital values in the Mt Wellington industrial market are expected to increase by 3.5 per cent over the year from March 2012. Prime rentals are expected to increase by 3.3 per cent over the same period.
Colliers International's latest research also shows industrial vacancy rates falling across Auckland. Industrial vacancy is expected to fall to 5 per cent by the end of the third quarter of this year, down from 6.2 per cent in August 2010.