A large 2ha investment property is on the market in the Mt Wellington industrial precinct with the offer of a sale and leaseback to a major Delmaine Fine Foods Ltd distribution and manufacturing facility.
Delmaine was established in 1980 and produces a wide range of fresh food products, as well as importing European items. It has a significant and growing export business and a dedicated team of food technologists researching and developing new products and recipes. Delmaine is also one of New Zealand's leading suppliers of processed food ingredients to large food manufacturers and fast food chains.
"Delmaine Fine Foods Limited is an ideal tenant for a buyer's portfolio, being well established and respected as a successful Kiwi company," says Greg Goldfinch of Colliers International's Highbrook-based industrial team who, with colleague Hamish West is marketing 5 Reliable Way for sale by deadline private treaty closing on May 20 unless it sells earlier by negotiation.
"With the combination of a brand-name tenant and a large land holding in sought-after Mt Wellington, this sale represents an excellent opportunity for investors," Goldfinch says. "This is a prime industrial asset occupied by a household name tenant on a new 12 year term with two eight year rights of renewal.
"The lease also has a very desirable 'triple net' structure, meaning the tenant is responsible for the cost of all upkeep and maintenance to the property. This makes it an ideal passive investment opportunity."
Goldfinch says the property will generate net annual income of $1.3 million with fixed annual rental increases and a market review half way through the lease term.
"At a time when there is a serious lack of significant industrial investment opportunities in the Auckland market, this property, with its strong tenant covenant and excellent fundamentals should be of interest to astute buyers," says Goldfinch.
Goldfinch says he expects the property will attract private investors, syndicates and property funds.
West says Delmaine's Reliable Way operation is one of its two specialised production facilities in New Zealand. "It is a substantial office and warehouse complex containing just over one hectare of floor space," he says.
"The building was originally constructed in the 1980s with a significant expansion completed in 1999. Delmaine also refurbished the office spaces in 2009. It has also installed significant upgrades to the warehouse space, including drainage, chillers, a food grade preparation area and associated plant and machinery."
West says the specialist fit out will remain with the tenant, providing an investor with a generic, functional and versatile industrial building.
The 10,496 sq m building which is full equipped with fire sprinklers includes 2870 sq m of well-presented offices over two levels, a large staff cafeteria and associated amenities.
The 7625 sq m warehouse includes a 1971sq m lower stud section incorporating a hygienic and high-quality food-grade manufacturing environment, as well 5654 sq m of newer clear span high stud space.
A large yard area is included on the property, with mature landscaping and trees as well as large asphalt sealed areas providing plenty of space for car parking and truck maneuvering.
The property fronts Reliable Way, a cul-de-sac off Leonard Rd on the northern fringe of the Mt Wellington industrial area, says Goldfinch.
"Leonard Rd runs off Penrose Rd, which is in turn linked to both Great South Road and Mt Wellington Highway - main regional arterial routes which provide convenient transit access to the property," West says.
Several high profile companies occupying facilities in the immediate vicinity include Fulton Hogan, Turners Car Auctions and Sky TV.
West says a nearby industrial park off Leonard Rd is being developed that will be mostly occupied by Fonterra.
The property is zoned Business 4, which is characterised by low to medium intensity, light industrial and service uses. Permitted activities include bulk storage, motor vehicle sales and service, offices, warehousing, car parking and retail premises.
West says Mt Wellington is considered one of Auckland's premier industrial areas, with excellent motorway access and a central location between the CBD, port and international airport.
"Mt Wellington has the benefit of being roughly mid-way between Auckland CBD and Auckland Airport, both of which are around 12 kilometres away. The suburb was one of Auckland's first industrial areas and it continues to be a fantastic home base for many of New Zealand's most well-known and established companies."
Mt Wellington is a very tightly-held area with a limited supply of investment properties, so those that do come on to the market generally get snapped up very quickly, he says.
Goldfinch says the Auckland Manukau Eastern Transport Initiative (AMETI) roading project being undertaken by Auckland Transport is expected to provide major benefits to the area.
"Stage One of the project is almost complete, with upgrades to the Panmure train station and a link road between Morrin Road and Mt Wellington Highway.
"The AMETI project will provide a much better connection for freight and business traffic for business occupiers in Mt Wellington," he says.
Two developers went "hammer and tongs" at mortgagee auction.