A substantial Auckland industrial facility, purpose-built for one of Australasia's largest privately-owned steel companies, is for sale with a long-term lease returning $1.34 million in net annual rent.
Vulcan Steel has occupied the 10,705sq m office and warehouse at 29 Neales Road, East Tamaki, since its construction 1996.
Located close to the tightly held Highbrook Business Park, it sits on a 16,019sq m freehold site with sought-after Heavy Industry zoning.
Andrew Hooper and Brad Johnston of Colliers International are marketing the property in conjunction with Scott Soroka and Nikolai Vulinovich of Barfoot & Thompson.
It is for sale by deadline for offers closing at 4pm on Wednesday 16 October.
Hooper says it is an outstanding industrial investment opportunity.
"The property offers superb investment fundamentals, from its standout location and flexible configuration to its strong tenant covenant.
"The property was design-built specifically for Vulcan Steel in 1996, expanded in 1997, and further extended in 2001.
"It has been engineered for heavy industrial use, with heavy-duty reinforcing to the concrete floor and steel portal frame.
These features provide gantry crane support and allow for bulk steel storage.
"A stunning architecturally designed office – featuring an exposed steel structure, varnished timber ceiling and hanging lights – looks into the warehouse and manufacturing operations.
"Tenant Vulcan Steel is one of the largest privately-owned steel distributors in Australasia, with nationwide trading operations on both sides of the Tasman.
"It occupies the premises on a 15-year lease, with seven years remaining as at July 2019. The lease returns $1,340,000 plus GST in net annual rent, with the next two-yearly market review in July 2021.
"Vulcan Steel's longstanding occupation of such a substantial site, combined with the potential for further rental growth, makes this investment opportunity not to be missed."
Soroka says the property is in a well-connected and established location at the heart of East Tamaki, close to the world-class Highbrook subdivision.
"Neales Road runs between the main arterial of Harris Road and busy Cryers Road. This provides excellent access to the Southern Motorway via the Highbrook Drive interchange, a short distance to the west.
"The location also provides easy access to nearby industrial hubs such as Wiri, Auckland Airport and Mount Wellington.
"As a result, the East Tamaki area is occupied by many of New Zealand's leading national and international brands."
Soroka says the property comprises quality office accommodation at the front with an 8.5m stud warehouse to the rear.
"The 9,985sq m warehouse provides drive-through access, enabling ease of loading and unloading by gantry cranes.
"The tidy offices are largely open plan, with a mezzanine office. The offices are separated from the warehouse by attractive glazing.
"The distinctive, architecturally designed exterior of the office combines extensive glazing with precast concrete."
Vulcan Steel launched in 1996, drawing on private capital and proven steel distribution experience.
The company has grown to be one of the largest privately-owned steel distribution companies in Australasia, employing more than 600 staff.
It occupies some 100,000sq m of building space across some 20 different sites in Australia and New Zealand.
Vulcan Steel operates in an industry with a small number of players, with most of the market share restricted to two or three companies.
Its New Zealand business is run as a standalone operation with a separate management team and autonomous purchasing and distribution networks.
Unlike most of its competitors, Vulcan Steel has a flat structure and owns its own transport fleet, providing an end-to-end solution for its customers.