Wiri rezone could bring big returns

This block of land at the southern end of Price Rd in Wiri is for sale.

A large 26.6ha block of land mostly planted in lettuces at the southern end of Price Rd in Wiri, South Auckland, promises salad days for a prospective purchaser.

"We understand that part of Manukau City Council's long-term development plan is for Price Rd to be extended to meet the quarry located at the end of McLaughlins Rd," says Derek Harries, associate director of CB Richard Ellis's South Auckland office, who is handling the sale in conjunction with colleagues Kevin Harrington and Paddy Callesen.

CBRE recently sold an adjoining 29ha land block in Wiri at 93 McLaughlins Rd, bought for landbanking and development.

However, the horticultural block in Price Rd does not have a number of issues inherent with that property, such as the need to restore a significant portion used for scoria quarrying.

"The Manukau City Council has consented in principle to rezone the quarry located on McLaughlins Rd property as a mixture of Business 5 and 6 permitting heavy industrial usage so it logically follows that similar rezoning for this adjoining property in Price Rd won't be very far away," Harries says.

The Price Rd block is held in two titles comprising one lot of 25.88ha and another of 7190sq m. It is currently zoned rural within the Manukau City Operative District Plan 2002.

"Once rezoned, the property will be incorporated within the Wiri industrial area that has experienced phenomenal growth over the past three years and seen values increase by up to 300 per cent during that time.

"The biggest constraint against industrial development in South Auckland is lack of space and there is a shortage of industrial land available for investors or owner-occupiers throughout the region. This big block in Price Rd provides what is arguably one of the last opportunities to buy a property with large-scale potential development opportunity, even though it will have to await rezoning."

Harries says the East Tamaki and the Airport Oaks areas are now largely sold so the only new land that can be opened up, apart from remaining land in Wiri, is in more distant areas such as Takanini and Drury.

"The Price Rd block is almost unique because, to my knowledge, there are no other sites of over 25ha coming on the market in south Auckland. Sizeable blocks of potential industrial land are almost non-existent at the moment within Auckland Regional Council limits."

Harries says its also very rare for properties of this size to come on the market with the potential to provide a significant return within a short period. The industrial market continues to remains strong within Auckland with an unsatisfied market for significant development sites.

Price Rd is near an established industrial area in McLaughlins and Roscommon Rds where land values are expected to be further enhanced through improved transport links in the area. Price Rd is situated off the western end of Puhinui Rd and about 1km from the Puhinui intersection. The extension of the Southwestern Motorway, planned for completion in 2007, will join State Highway 1 just south of Manukau City and the site is just over one kilometre from that main intersection.

"It will have excellent access to the southern motorway and to Auckland International Airport via Puhinui Rd," says Harries. "It will also have access to Ports of Auckland and the CBD via both the southwestern and southern motorways, making the site a logical location for large format warehousing and logistics operators."

The land abuts properties owned by Tunicin Investments Ltd and Aarco Holdings, viewed as "two of Auckland's smartest and well connected property investors".

A number of developers and investors have big holdings in the area including Hugh Green Group, Southpark Investments, Wilmshurt Properties, SAI investments, McCahill Group, Athy and Quadrant Properties Ltd.

A development in McLaughlins Rd is a 1.5ha industrial park by Hughes & Tuke comprising eight warehouse and office buildings. Among the companies that have occupied new premises in the Wiri area are Mitsubishi Road Life, Cavalier Carpets, Stevens, TDL Transport, Kiwi Steel, Domett Frauheuf, Perry Developments and the Department of Corrections.

Puhinui Stream forms part of the southern boundary of the property and a kiwifruit orchard is on the northern boundary.

There are two old houses on the property which are either vacant or used by the horticultural business leasing the land. Continuing to rent the land for market gardening would pay the rates while a new owner waited for rezoning.

Harries says it is difficult to value the land.

"However, with Business 6 selling at in excess of $200sq m in Wiri, we have no hesitation in stating that this land, once zoned and subdivided, would also achieve values of $200sq m. "
Allowing for industrial subdivision, roading and reserve contribution, it would not be unrealistic to see the 26ha having a capital approaching $40 million after rezoning - without allowing for increases in land prices.