A portfolio of three big industrial properties is for sale comprising two Auckland complexes and a third in the Lower North Island town of Levin.
"This sale represents a rare investment prospect in New Zealand's tightly held industrial market," says Greg Goldfinch, national director of industrial sales and leasing for Colliers International. Goldfinch, and colleagues Paul Higgins, Dwayne Warby and Peter Herdson, are marketing the industrial trio for sale by international deadline private treaty closing on Wednesday September 28 unless they sell prior to that date by negotiation.
Two of the properties at 20 Mahunga Drive, Mangere, and 11 Tararua Rd, Levin, generate a combined rental income of nearly $3.5m plus GST from leases to global paper and packaging giant, Oji Fibre Solutions (NZ) Limited (formerly Carter Holt Harvey), which has been operating from both sites for more than 35 years.
The third property is a 13,280sq m warehouse and office facility at 195 Browns Rd, Wiri, that is being sold with vacant possession.
Goldfinch says features of the Mangere and Levin properties are the excellent tenant covenants and long lease terms, while the Wiri property's vacant status presents add-value potential.
The lease agreement for the freehold 41,981sq m Mahunga Drive complex has a remaining term of 9.33 years with two further five-year rights to renewal. It provides Consumer Price Index-based annual rental increases, with market reviews on January 1, 2019 and on renewal dates and generates $2,442,530..40 net rent per annum plus GST.
"The Mahunga Drive property is a prominent, high quality facility which underwent major redevelopment in 2015, including a roof replacement of the main factory," says Goldfinch. "It sits in a prime industrial precinct with major road infrastructure works that have just been completed. As a result, it has excellent access to main arterials and the motorway network, is close to Auckland Airport and has multiple access points from its three street frontages.."
The property is "a large footprint" manufacturing facility originally constructed in the late 1960s by Carter Holt Harvey. The main manufacturing area constitutes highly functional medium stud space with excellent lighting.
Higgins says refurbishment of the warehouse and office and extension of the loading dock canopy has significantly improved the tenant's all round efficiency. "The office refurbishment has produced a high quality modern space with excellent natural lighting. The ground floor is accessible from Mahunga Drive and comprises a high-stud open plan reception area along with a commercial grade kitchen and canteen area."
Goldfinch says Tararua Road property in Levin earns rent of $1m net per annum plus GST and represents an excellent opportunity for investors. "It encompasses a 50,483sq m freehold site with surplus land of about 10,000sq m which could be used for expansion or development".
The lease of 11.58 years has a further 10 year right until renewal and comes with 2.5 per cent fixed annual rental increases. Market reviews are on April 1, 2023 and at lease renewals. The Levin property's strategic geographical location is critical to the business and enables packaging products to be distributed from Wellington to the south and as far as Mount Maunganui in the north. "It's only 2km from Levin's town centre, 76km south-west of Wellington via State Highway 1 and 40 km north-east of Palmerston North via State Highway 57," says Goldfinch.
Oji Fibre Solutions (NZ) Limited was formed in 2015 as a joint venture between Oji Holdings, who is a major shareholder, and the Innovation Network Corporation of Japan. Oji Holdings is one of the largest forest, paper and packaging company in the world and is listed on the Tokyo Stock Exchange. The joint venture purchased the century-old Carter Holt Harvey Pulp, Paper and Packaging operation in 2015.
Warby says the 31,223sq m freehold property at 195 Browns Rd, Wiri, is ideal for buyers looking to occupy, invest or develop such an industrial site. "It sits on a prominent corner and is a large, well presented and highly functional industrial facility of 13,280sq m/
"On the southeast corner of Browns Rd and Chonny Crescent, there is surplus land of about 7311sq m which could be developed or subdivided. This is a luxury in such a tightly-held precinct," Warby says. "Directly across the road is Countdown supermarket and associated retails shops.
"The road frontages of 192m to Browns Rd and 148m to Chonny Crescent give convenient drive around capability with exceptional access to main arterials, motorways and Auckland International Airport.
"It's only 3km south of the Manukau City Centre, 6km east of the airport, and just 20km from the CBD, really boosting its value in terms of location. With State Highway 1 and 20, only 4km away, it offers an exceptional logistical connection to wider Auckland."
The building is a clear span bay with a stud height of around 6.15m, at the portal knee rising to 8.2m at the apex. An extension adjoins the original warehouse to the northwest and contains two bays of around 25m in length with a stud height of circa 6.2m rising to 9.2m at the apex.
Higgins says the two-level office area at the southeastern corner adjacent to the main carpark is a convenient work area for staff. "Reception is on the first floor, along with partitioned office space, a boardroom, staffroom, and kitchen facilities. Additional offices are located on the ground floor," he says.
Goldfinch says the added bonus of this site is the huge development potential of the excess land.
"The chance to purchase any large footprint industrial facilities is very rare with vacancy rates below 2 per cent," he says.
The property is zoned Light Industrial under the recently approved Auckland Unitary Plan, allowing for a range of industrial uses characterised by low to medium intensity.