Tawa Junction Commercial Business Park, at 10 Surrey St. Photo / Supplied
The fully leased Tawa Junction Commercial Business Park — comprising a mix of council, government, national and local tenants — is on the market.
JLL capital markets team's John Binning and his colleague, Wellington director John McKenzie, are marketing the freehold property, which has 200 car parks, alongside State Highway 1. The business park, at 10 Surrey St, is for sale by expressions of interest closing at 5pm on Tuesday April 9.
Binning points out that it is a 12-minute drive from Wellington CBD; six minutes from Porirua City; near motorway on-and-off ramps and adjacent to Tawa's train station and Park'n Ride.
"This business property offers an extraordinary passive investment with a combination of low management costs, strong future growth potential and numerous liquidity options via consented unit titles," says Binning.
"The predominantly single-level building has been refurbished to a level rarely seen in this region. Though Tawa's largest and highest-quality commercial business park, it remains under-developed from a highest and best-use perspective, presenting opportunities for further development."
The property has a net lettable area of about 11,216sq m, on 2.04ha of flat rectangular land, zoned Business 1. It generates a net passing annual income of $1,180,948 plus GST and operating expenses (OPEX), from eight tenancies on weighted average lease terms (WALT) of 5.88 years.
Binning says initial tenancy terms range from six to 15 years, which — with a diversification of occupiers — provides certainty of split-risk income across the tenancy schedule.
"There is the potential for a six-container-park on site, which would earn $180,000per annum in rent, taking total prospective annual income to $1,360,948. The park already has good site circulation for trucks and heavy goods vehicles."
McKenzie describes an excellent mix of tenancy types. Rental income from these breaks down, as follows: Industrial and trade, 28 per cent; childcare and services, 27 per cent; professional office, 22 per cent; food, including the proposed container park, 12 per cent; health and leisure, 11 per cent.
"All leases are on a net rent plus OPEX basis (rarely seen in the Wellington region), with good growth potential. The refurbished building has new 'turn-key' fit-outs owned by landlord, while the Business 1 zoning allows for a 15m height limit as of right. The building has an A grade seismic rating and is fully equipped with fire sprinklers," says McKenzie.
Anchor tenants, providing 66.5 per cent of the total net income, are:
• Connectics Ltd, a wholly owned lines infrastructure subsidiary of electricity distribution company Orion which is 89 per cent owned by the investment arm of Christchurch City Council;
• Educare Tawa Ltd, leasing Unit 2 as a new licensed centre, with an exclusive use outdoor play area, Educare is an early childcare education operator with 14 centres throughout the North Island and set to expand into the South Island in 2019;
• Orogen Ltd, a group of chartered professional (civil) engineers, registered professional surveyors and licensed cadastral surveyors;
• Wellington Beds Ltd, a local business founded in 1992 which has become a large scale retail institution with stores in Thorndon Quay, Porirua, Lower Hutt and Upper Hutt. The head office, manufacturing plant and factory direct showroom opened at Tawa Junction mid 2015; and
• Bigair Gymsports and Cheerleading, which has contracts with schools to provide physical education services and; which meets a demand for the enrolment of children in its various sports, cheerleading and recreational programmes.
The Transmission Gully roading extension will improve access to the Tawa region for vehicles travelling from the Hutt Valley and further north, says McKenzie.