Burger King's national distribution centre which is for sale in Otahuhu.
Burger King's national distribution centre in South Auckland has been put on the market with a long lease in place to the multi-national fast food chain.
"A business like Burger King makes an ideal commercial tenant," says Andrew Hooper of Colliers International who, with colleague Hamish West, is marketing the property at 10-18 Alderman Place, Otahuhu, for sale by offers closing on October 13, unless it sells earlier by negotiation.
West says dry and frozen goods are stored and distributed to Burger King's 83 restaurants nationwide from the site which the chain has occupied for the past 15 years. "We expect investors to be attracted by the long term lease to Burger King, which has further rights of renewal built in, as well as by the strong tenant covenant provided by a global brand."
Hooper agrees in noting that Burger King is a well-established, large international corporation with plans for further expansion in New Zealand. "So this property will be seen as a very attractive long term, passive, income-generating holding," he says. "It offers a simple investment in a popular asset class. Industrial investment properties in good locations with strong tenants in place are continually sought after, so we think this property will be appeal to a range of local buyers. We also expect to receive interest from investors around New Zealand looking for solid long term income and capital growth opportunities."
West says Burger King's current lease has the potential to be extended to June 2052, if all rights of renewal are exercised. The property generates $470,653 in net annual rental income, with regular rent reviews providing possible income growth.
The 1406 sq m building includes a high stud warehouse, dry store, freezer and chiller rooms, a plant room and loading bay with canopy and five roller doors.. Offices and amenities are provided on a mezzanine floor.
The dry store area can accommodate up to 385 pallets, with a further 500 pallets able to be stored in the freezer room.
Hooper says the 8184 sq m site includes "a massive yard allowing good vehicle access, parking, and container and pallet storage. "However, it would also be ideal for future expansion or redevelopment as a long-term option for the new owner."
West says the site is across three freehold titles and comprises a significant land holding in one of Auckland's most sought-after industrial precincts. "These sites rarely become available," he says.
Hooper says the property also has valuable Business 6 zoning, which permits a wide range of industrial activity including heavy industry.
"Large parcels of land with this zoning are becoming increasingly difficult to secure in Auckland as a result of the city's residential expansion and the planning controls that have to be put in place near more sensitive areas such as housing and retail.
"A similar Heavy Industry zoning will apply to the site under the Proposed Auckland Unitary Plan," he says.
West says the property also benefits from a location mid-way between two motorways, making it a highly desirable prospect for businesses relying on road transport.
"When the Waterview Connection opens joining State Highways 20 and 16 there will be two motorway options for routes north, south and west from this property. It is expected this area will greatly benefit from the Waterview Connection over time."
West says Otahuhu's convenient location and its status as one of the most cost-effective industrial locations in Auckland have seen the area grow in popularity.
"This part of Otahuhu is a long-established industrial precinct which continues to prove a popular location for many businesses which appreciate being close to motorways and the airport," he says.
Several well-known national and international brands have distribution centres in Otahuhu, including Progressive Enterprises, L'Oreal, Fonterra, Supercheap Auto, Konica Minolta and USG.
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