A big North Shore industrial property with a new lease to an Australian tenant expanding in New Zealand is one of the 'trophy' offerings up for sale in Bayleys' latest Total Property portfolio.
The 1.6664ha site, with room for further development, at 17 Kahika Rd, Birkdale houses a 6012sq m warehouse and office complex which is producing a net annual rental income of $735,000. It is being marketed by Matt Mimmack, Laurie Burt and Ranjan Unka of Bayleys North Shore Commercial and is for sale by deadline private treaty with a sale date of September 29, unless sold prior to that date by negotiation.
Mimmack says the former occupier of the property, Cato Packaging Ltd, has been purchased by MPM Marketing Services, a major manufacturer and distributor in the disposable food packaging industry. It has a signed a new six-year lease on the premises from July, with three six-year rights of renewal.
Established 35 years ago, the company manufactures and promotes over 2000 products across Australia and New Zealand, with over 50 per cent of its range manufactured in Australia.
"Of significant interest to investors will be the lease's fixed rental increases of three per cent per annum that will provide rental growth well ahead of the current very low rate of inflation which is expected to persist for some time to come," says Mimmack.
"The property will also appeal to add value investors and developers because there is about 3250sq m of vacant land with development and subdivision potential. The lease has been structured to provide MPM with an expansion option and also offers the new owner other opportunities in the future."
The property comprises an industrial warehouse and office building completed in the late 1980s with subsequent refurbishments and additions, including a new high stud warehouse. It was originally built for a multinational legal publishing company and has subsequently been occupied by Warehouse Stationery and Cato Packaging.
The original 1493sq m warehouse has a stud height of around 6.6m to 7..8m at the apex; is accessed via two motorised roller doors, and provides a good standard of medium stud warehousing, says Mimmack.
The newer 2144sq m warehouse was constructed in 2012 for Cato Packaging to a high specification, with 175mm precast concrete walls and a stud height of 12m rising to 12.6m at the apex. Mimmack says apart from a single line of steel columns at the centre, the warehouse provides clear span accommodation and has the capacity to hold up to 3000 pallets. It can be accessed via three roller doors with large canopies over each.
The 2028sq m of office space is spread over three levels in a building adjoining the two warehouses which also include a 133sq m plant room. Unka says the office component provides a good level of amenity including air conditioning, lift, modern data services; and an interconnected cafeteria and training room, with two deck areas on the upper level.
There is an asphalted yard area of approximately 1000sq m at the southern end of the original warehouse and ample car parking of 155 spaces with numerous container drop areas onsite.
Resource consent was obtained in 2010 for another 2138sq m warehouse to be developed on land directly to the south of the original warehouse. It is proposed this be constructed of tilt slab walls with a stud height of approximately 9m.
Unka says MPM has an option in its lease to require the owner to build this warehouse in return for a commensurate increase in its rental and an extension of its existing lease over the entire premises for a further six years.
The property has dual frontages to Beach Haven Rd and Kahika Rd which allows complete drive around access through the site. Burt says it is "a landmark property" in a well-established industrial enclave comprising around 24 properties located between the main arterial of Beach Haven Rd and the Kaipatiki Creek tidal inlet from the Waitemata Harbour's upper reaches.
"The property has good access to the CBD and port, with a large catchment of supporting labour in the surrounding predominantly residential areas.. It also has a sought after and valuable Heavy Industry zoning under the Proposed Auckland Unitary Plan which permits a wide range of warehousing and manufacturing activities."
Burt says another option available to the new owner in addition to the proposed warehouse would be to build three smaller industrial units with frontage onto Beach Haven Rd.