A strategically located standalone industrial building in the heart of the North Shore's busy Wairau Valley is being offered for sale as an investment property with a diversified income stream from two tenants and having the potential for a buyer to own and occupy in the future.
"This property has location, scale and income," says Simon Farland of Barfoot & Thompson Commercial North Shore who, with colleague Henry Barfoot, is marketing it for sale by deadline private treaty closing on Wednesday, August 6, unless it sells earlier by negotiation.
"Properties of this nature are seldom offered to the market. Its sale represents a rare opportunity to acquire a quality industrial investment in a sought-after price range in a traditionally very tightly held location," Farland says.
"In addition to private investors, it's a property that will appeal to family trusts, add value investors and owner occupiers. The building occupies a wonderfully prominent position on Hillside Rd just 700m from the Tristram Ave on-and-off ramps of the north-south State Highway One motorway."
Farland says the office and warehouse building makes an excellent proposition for an investment portfolio as a fully leased property in a popular location with split risk income from two tenancies paying $328,513 a year.
"It is a modern and well-maintained premises offering low cost of occupation when compared to other properties in other industrial estates such as Albany," he says.
"The building sits on a large 3748sq m freehold site with 46 on-site car parks and has an unbeatable aspect with expansive views across the Wairau Valley offering great signage prospects."
The stratum in freehold building has a total area of 2477sq m comprising 920sq m of warehouse area, 630sq m of ground-floor office, 740sq m of first-floor office, 107sq m of mezzanine storage and 80sq m of amenities.
Constructed mainly in the 1970s with office additions completed in the 1990s and 2000s, the building is predominantly concrete block with a plaster facade, aluminium joinery and steel roofing. Internal office finishes are of a good standard including carpet, ducted and high-wall air conditioning and a medium level of internal partitioning. Staff amenities include a large lunchroom with an expansive exterior deck with an outlook over Wairau Valley.
The anchor tenant is Chrisco Ltd, which has specialised for over 30 years in creating gift hampers and baskets. The company has a four-year lease for 1737sq m beginning on September 1, 2012, and paying $211,438 a year in rent, plus GST.
"Chrisco was the previous owner occupier and has been in occupation since 2000," Farland says. "The long-term occupier has used the property as its headquarters for its successful Christmas hamper and gift business since 2000.
"A sister business, My Layby, also operates under Chrisco management and is located within the building."
The first-floor office tenancy of 740sq m is leased to the Electoral Commission for nine months until January 1, 2015, beginning on April 1 this year for rent of $128,600 per annum, plus GST.
"The Electoral Commission will use the first floor of Hillside Rd for its electoral offices for the Northcote electorate for the 2014 general election," Farland says.
"The tenancies offer very cost-effective and efficient office accommodation for tenants looking for low-cost but quality space. When compared to alternative North Shore locations, such as Albany, the overall cost of occupation is as much as half of what other locations demand so it is a very appealing prospect to the tenants.
"The building also presents very well, particularly when compared with similar properties in the area. The level of staff amenity with a large, expansive outdoor deck area is second to none."
Farland says having the building currently divided into two tenancies on leases nearing expiry not only allows for split risk investment but also possible expansion for the long-established major tenant or future occupation of the entire building by an owner occupier.
Henry Barfoot says the property is zoned Business 9 under the Operational North Shore City Plan and is designated Business -- Light Industrial under the proposed Auckland Unitary Plan.
"This zoning covers a wide range of uses including manufacturing, industrial, office and showrooms, subject to various performance criteria, including car parking, hours of operation and noise emission," he says.
Business 9 zone has been applied to areas which are established industrial and commercial areas. "The zone specifically excludes activities which will generate high levels of vehicular traffic and accordingly restricts retail."
Barfoot says the proposed Unitary Plan having the property marked for "light industry" is consistent with the balance of the estate and largely with the current zoning.
Some 700m from Wairau Rd, 46-48 Hillside Rd is on the southeastern side of Hillside Rd, which is a long-established street linking the main arterial Wairau Rd with Diana Drive and the residential suburbs of Glenfield.
"It is in the heart of the Wairau Valley, which is the original industrial estate on the North Shore," says Barfoot.
"In recent times, the precinct has experienced a regeneration phase making way from traditional industrial businesses to stores and showrooms for large bulk retailers.
"A number of older sites are being converted to suit this style of operation due to Wairau Valley being at the hub of a majority of North Shore residential suburbs.
"Its popularity as a business centre due to its relative closeness to the Auckland CBD, other businesses on the North Shore and being surrounded by an educated workforce in the nearby suburbs, ensures its popularity among both occupiers and investors."