A large industrial property, serving as My Food Bag's distribution centre near Auckland Airport, is for sale with a long-term lease in place to the home delivery meal kit provider.
My Food Bag moved into the 4610sq m cool store and office premises located on a 1.0491ha site at 12-16 Brigade Rd, Mangere, 18 months ago following a major refurbishment and refit of the complex.
The company signed a nine-year lease in October 2017 with three three-year rights of renewal which, if exercised, would take its occupation of the road-frontage property through until 2035.
The owner of the property has now decided to sell and has appointed Bayleys' national industrial and logistics director, Scott Campbell, and senior industrial agents Jamsheed Sidhwa and James Hill to market it.
One of the trophy listings in Bayleys' latest Total Property portfolio, the property is for sale by deadline private treaty closing at 4pm Thursday April 11, unless sold earlier.
Campbell says it will generate initial net annual rent of $802,067 plus GST for the new owner with yearly increases to follow.
He says the offering provides My Food Bag with a long-term lease that comes with fixed annual rent increases of 2.5 per cent each year from October 2020.
"Located within the popular Airport Oaks industrial precinct, this is a well-engineered building with a good track record for perishable food handling. It has also benefitted from ongoing upgrading to keep in step with exacting food handling best practice standards."
Campbell says another key feature of the property is its 10 cart docks which enable multiple vehicles to be loaded at the same time. Some of the docks are covered with a cantilevered canopy to provide all-weather protection for food trucks transporting temperature sensitive products.
"The large site's dual street access and drive around capability also enhance the movement of vehicles and health and safety across the site," he says.
Jamsheed Sidhwa says the Brigade Rd premises, and in particular its large cool store, has plenty of capacity to cater for My Food Bag's continuing growth.
The original cool store with its specialist thermal floor and wall and ceiling panelling was constructed in 1988 and extended in 1995. It was refurbished again in 2017 prior to My Food Bag's occupation incorporating the latest generation of 'carbon tax neutral' refrigeration plant and equipment, reflecting the company's focus on sustainability, Sidhwa says.
The refrigeration system which has two compressors was designed around maintaining internal areas at an operating temperature of plus 4C. "The insulated panelling walls are 125mm to 200mm thick panels, well above the minimum recommended thickness. The vendor commissioned a report on the system and the panelling last year that showed it was performing effectively and efficiently," Sidhwa says.
"The lease conditions place responsibility on the tenant for all maintenance, repair and replacement of the fit out and equipment, including the refrigeration plant, and to ensure that it is compliant with food grade standards. This enhances the appeal of this property as a hassle-free, bottom-drawer investment opportunity."
The property also has single level offices at its street frontage with good amenities, plenty of natural light and parking for up to 40 vehicles. This part of the property was also extensively upgraded and modernised both internally and externally in 2017.
The Brigade Rd property has been placed on the market at a time when industrial vacancies across Auckland and at the airport are at an all-time low.
Bayleys Research's annual Auckland industrial accommodation survey completed last month shows that the vacancy rate for the airport precinct, which includes Airport Oaks, stood at just 0.9 per cent, down from 1.5 per cent last year.
Despite a significant increase in development activity, the amount of available space at the airport has been on a downward trend since 2013 when the vacancy rate was close to 6 per cent.
Campbell says the airport has the highest occupancy rate of all of Auckland's main industrial precincts monitored by Bayleys Research. The overall Auckland industrial vacancy rate was 1.7 per cent, almost half last year's figure of 3.3 percent.
"The airport currently has about as close as you can get to a 'nil' industrial vacancy rate and the availability of substantial food grade compliant premises is even more limited to the point where it is virtually non-existent."
Campbell says the expansion in e-commerce has been a key factor in the strong demand for premises close to the airport.
"With the continuing increase in sales being done via the internet, speed to market is very important so having modern distribution centres close to airports and motorway networks provides competitive advantage.
"The opening of the Waterview tunnel and the associated western ring route of motorways has enhanced the airport's connectivity to the rest of Auckland, providing faster access to rapidly growing West Auckland and markets north of the harbour bridge."
James Hill says the airport area also has a wide range of amenities that are attractive to businesses occupants. "These include hotels, conference centres, childcare, gymnasiums, rental car depots, a supermarket and other retail and food and beverage offerings which are now an integral part of this well-established and rapidly growing business precinct."
Properties surrounding 12-16 Brigade Rd, in addition to other light industrial premises, include Holiday Inn and the Naumi Auckland Airport hotel.
My Food Bag distributes over 1m meal kits to customers a month and announced in December last year that it had delivered its 50 millionth meal, five years after it was founded by Cecilia and James Robinson, Nadia Lim and husband Carlos Bagrie and Theresa Gattung.
During that time, the New Zealand owned company's range has grown to include 20 different bags across its My Food Bag, Fresh Start and Bargain Box brands. Customers order online and receive food bags containing recipes and ingredients for a week's main dinner meals.
My Food Bag added over 150 new suburbs to its distribution list in July last year, which the company said took its delivery coverage to 87 per cent of New Zealand.