Patience needed to find the perfect space

Mercedes-Benz has taken a 10-year lease on a new showroom. Photo / Supplied

In a market that is seeing increased vacancy with reports of fewer tenants for industrial space, Colliers International says it has leased more than 80,000sq m of industrial space this year, including large leases in Auckland for four globally recognised brands Mercedes, DSV Air & Sea, Kmart and Dunlop Living.

Greg Goldfinch, manager of Colliers' Highbrook office, says parties seeking to create deals need to be patient as the lead-in time can take years.

"Tenants are taking a long-term view to ensure they get the right solution," Goldfinch says.

"Any agent can introduce a tenant to a building or a green-field site but finding the right solution is not so simple.

"Businesses are looking for their property to be operating at absolutely 100 per cent efficiency. More often than not, prospective tenants are now unwilling to compromise so negotiations often end in a new design-build solution that allows them to start from a blank canvas and get it right from the outset with a goal of greater profitability.

"As a result, it has become a specialised process and it is important agents understand intimately the businesses they are working with, what their drivers are and the need for confidentiality a lot of the time."

Goldfinch says Colliers is currently working exclusively with a number of well-known companies, who between them have requirements for in excess of 90,000sq m of industrial space.

Goldfinch and colleague Andrew Hooper managed the process for the New Zealand arm of luxury carmaker Mercedes-Benz, which took a 10-year lease at the entrance of one of the country's most established office parks at 9 Pacific Rise, Mt Wellington.

The 2926sq m complex, which Mercedes will move into in the first quarter of 2011, is owned by Auckland-based Direct Property Fund.

It consists of a modern purpose-built building with a 463sq m foyer and showroom, two levels of offices and a 1039sq m workshop and warehouse space.

The 10-year lease on the property comes with two five-year rights of renewal, with a final expiry on December 31, 2030.

Off the back of this success, Colliers was asked by Mercedes to undertake a second project - to find an appropriate location for its spare parts business, which had a 3000sq m space requirement.

"After narrowing down to a shortlist of three options, negotiations commenced with Auckland Airport and, after six months of discussions, a 10-year deal was completed for Mercedes to occupy a purpose-built facility at the airport's new business park known as The Landing," Hooper says.

Colliers has also sourced a 3600sq m warehouse and office facility at Auckland Airport for DSV Air & Sea, one of the world's leading air and sea logistics companies.

Hooper and colleague Paul Jarvie say the new facility is on Landing Drive next door to the new Mercedes Benz parts facility.

"Auckland Airport worked to provide DSV with a flexible lease structure to suit its business requirements, which included additional land for expansion of the warehouse facility," Jarvie says.

Back in March, Goodman said Kmart was set to relocate its main New Zealand distribution facility in a $19.2 million warehouse and office property at the M20 Business Park in Wiri, Manukau City.

This deal, managed on behalf of Kmart by Dwayne Warby and Nigel Ingham of Colliers' Highbrook office, will see the 13,400sq m office warehouse facility leased on a 12-year term with two five-year rights of renewal.

Warby and Hooper also negotiated a new design-build warehouse/manufacturing/distribution centre for Dunlop Living at the Peninsula Business Park in Avondale, to be developed by NZX-listed industrial property specialist Property For Industry. Dunlop Living has taken a 13-year lease and will take occupancy in the first quarter of 2011.