Storage provides a key to profitable business

This storage unit facility in Parnell is up for sale later this month. Photo / Supplied

The high-profile Storage Express self-storage business at 30 The Strand, Parnell, comprising 952 storage units over six levels, is being sold by mortgagee sale as a cashflow-positive business going concern.

First mortgagee Marac has issued instructions for the sale of the freehold buildings on leasehold land through receiver Steve Lawrence of PKF Corporate Recovery Ltd.

The property, with 24 external parking spaces secured by full-height fencing and gates, is being sold exclusively by Paul Gilberd and Bill Ludbrook of Barfoot & Thompson Commercial with tenders closing at 4pm on Thursday April 22.

"Self-storage facilities offer excellent long-term cash flow and as such are very tightly held assets that seldom come to market," Gilberd said. "This business continues to trade well but its previous owners had other unrelated financial issues which resulted in this asset coming to market."

In the year to February 2010, the business delivered a cash surplus of $645,000.

Most of the cashflow is generated from the monthly rentals for its storage units. While the company's office hours are from 8.30am until 5.30pm, customers were able to access their storage units until midnight and some were granted 24-hour access. In addition, the business has a leased tenancy component with 295sq m of its buildings rented to a childcare centre with a right of renewal on May 1, 2015 and a final expiry date of April 30, 2021.

Storage Express, which commenced trading in early 2006, has a total area available for storage of 8765.61sq m with 116.23sq m of offices and amenities.

Parnell Storage Holdings Ltd and Parnell Storage Lease Ltd were placed into receivership on February 23 last year. Storage Holdings owns a ground lease at 30-38 The Strand which commenced with the Ngati Whatua O Orakei Maori Trust Board on August 2, 1996 for 150 years.

The site comprises an irregular-shaped corner lot of 3691sq m with a deferred frontage to The Strand of 24.72m and frontage to Ngaoho Place of 98.21m.

The receivers were seeking to sell as a going concern the business and assets of Storage Holdings along with its ground lease.

Other assets include the lease to P Class Childcare, which generates $81,000 rental income a year plus GST; the company's intellectual property; goodwill and "the opportunity to offer employment to the existing staff" - two full-time and one part-time employee who run the business.

Also included in the sale is the company information systems and client database containing contact details of more than 3600 clients who have previously used the storage facility.

The company's building is constructed of reinforced concrete with its walls comprising concrete block with metal cladding and aluminium joinery. A goods service lift operates to all storage unit levels.

"The property is within the Auckland CBD fringe, in a well-regarded area which is benefiting from an expanding and high-density population," Gilberd says.

"There is a high cost of entry into the unit storage business in central Auckland, which strengthens the competitive position of this business. In addition, there are a large number of storage units that have the potential for other uses and which would diversify the overall business risk. Two additional levels of storage units are possible given the available height limit subject to resource consent."