A 3.2 hectare freehold site close to the Sylvia Park shopping centre in Mt Wellington is for sale offering multiple future options for the next owner.
One of the 'trophy' listings in Bayleys' latest Total Property portfolio, released to the market yesterday the big site located on two titles at 79 Carbine Rd and 10 Clemow Drive and encompasses 6634sq m of industrial buildings with eight leases generating net annual rental income of just over $1 million a year.
"This is an under-developed property for such a large land holding and has a lower density of building coverage than most other surrounding properties in this sought-after location," says Sunil Bhana, Bayleys' Central West Auckland industrial manager. "It therefore offers a big opportunity for add-value investors, developers or an owner-occupier to maximise the value of the site and its location, either by adding further buildings or undertaking a complete redevelopment."
Bhana and senior Bayleys broker Steve Orr are marketing the property for sale by tender closing at 4pm on Thursday, September 14.
Orr says the current owners purchased the site through Bayleys in 1993. "There has been huge development in the surrounding area since then led by Kiwi Property's massive Sylvia Park flagship development nearby," he says.
"The vendors have secured a good variety of tenancies which are providing a solid cash flow, while preserving the ability to further develop the site to its full potential at a later date.
"They have structured the leases to provide maximum flexibility - all are short term or have demolition clauses which means they can be terminated by giving 12 to 18 months' notice to the tenant."
Orr says the property comprises a mix of permanent and temporary buildings together with associated yard areas.
The largest lease is to Fonterra Brands NZ which generates just over half the property's income.
It occupies a 2500sq m cool store facility with associated offices, loading canopy, truck wash and a 2800sq m yard area on the north-western corner of the site accessed off Clemow Drive. Fonterra signed a deed of variation and extension of its lease for a further eight years from June this year over the premises which it uses as a milk distribution facility. This move followed significant refrigeration plant and building upgrades which included increasing the seismic rating to 100 per cent of New Building Standard (NBS).
At the north-eastern end of the site, a large industrial building accessed from Carbine Rd has been divided into multiple tenancies, the largest of which is a VTNZ vehicle testing station with 11 roller doors, inspection pits and associated office space.
The remainder of the building is occupied by industrial users Quattra Mechanical and All Crane, with about 690sq m of vacant office space. The balance of the site is mainly used by yard users with temporary structures in place for office and storage; and it also includes a BP truck fuel stop.
"Because the land is held in two titles, each could be redeveloped separately and potentially sold off individually at a later stage," says Orr. "Obviously, Fonterra's new eight-year commitment to the 10 Clemow Drive title increases its appeal as a long-term hold; but then the demolition clause in the lease means that land could also be redeveloped at an earlier stage. There are many angles to explore."
Bhana says the property is extremely well-located in the heart of Mt Wellington in the geographic centre of Auckland. "The area is still regarded as one of New Zealand's best industrial locations. It has undergone substantial growth and infrastructure improvements as well as a significant change of use in parts of the precinct led by the development of the Sylvia Park Shopping Centre.
"In terms of location, it doesn't come much more prime than this, given the property's position near one of the entrance ways to Sylvia Park and a short walk away from the Sylvia Park Train Station.
"In addition, there are frequent bus services nearby and the property is also well serviced by easy connections to the South Eastern arterial, Mt Wellington Highway and State Highway One (SH1). It is also close to the proposed East West link, one of Auckland's top priority transport projects which will provide a better connection between SH1 and SH20 and improve connections to rail and freight hubs," says Bhana.
"Property in the surrounding area is tightly held and, in general, is experiencing high demand and low vacancy rates with a shortage of sites available for redevelopment."
Bhana says Sylvia Park is a big magnet for the area, drawing customers from across Auckland and beyond and generating annual sales of more than $500m.
Kiwi Property Group is currently expanding its food and beverage space, constructing a new office tower in the airspace above the centre and adding 600 carparks with the construction of a new multi-deck carpark building. A further $200 million retail expansion is also planned which will include at least one new department store.