North Shore's pre-Super City sell-off

The 3.8ha site at Albany is handy to the motorway and offers a rare opportunity for the likes of a developer or owner-occupier. Photo / Supplied

The North Shore City Council is selling off the 3.8 hectare site of its former works depot at Albany in its last big property sale before being merged into the Auckland Super City.

Techscape, a combined North Shore and Waitakere City Councils works and maintenance enterprise was run from the site until the business was sold to private contractors in 2006. Since then the land has been leased to private businesses.

Situated on the corner of Bush and Paul Matthews Rds, the property is managed as a separate investment by council subsidiary NSC Holdings.

Last month the Auckland Transition Authority gave the council approval to dispose of NSC Holdings, generating questions about how best to use the funds from the property sale.

John Bedford, CB Richard Ellis's North Shore managing director, who is marketing the site with Simon Farland, CBRE's associate director industrial and logistics, says the property presents a rare opportunity for any astute developer, owner-occupier, investor or land-banker.

"It is the biggest available single tract of unencumbered land in one title with a Business 10 zoning, the most flexible and liberal on the North Shore. We are always getting inquiries from businesses for land with this zoning but it is scarce and difficult to find sites that have owners willing to sell."

Bedford says it will be appealing to any property player as it carries holding income of $755,000 until December next year and possibly longer.

"It is instantly bankable. The income will more than cover holding costs and gives a new owner 18 months to plan their next move, which runs the gamut of industrial property from retaining the existing tenants to subdivision or long-term land-banking. This is a property where anything is possible and they don't come along often," says Bedford.

He says the site lends itself to large footprint industrial operators, a mix of small unit development for owner-occupiers, yard or storage-based companies, or land subdivision.

"The site lies within half a kilometre of Upper Harbour Drive and one kilometre west from the Northern Motorway and is ideal for a higher and better use. The holding income also allows for a more passive approach from add-value investors or land-bankers."

CB Richard Ellis' research shows Albany has 38.6ha of vacant "Greenfield" or future development "brownfield" business-zoned land remaining.

Farland says the absorption rate of land in the past three to four years has been about 10 hectares a year. "This holding represents about one-tenth of the remaining land and development sites available in Albany. "To be able to land-bank this while still maintaining a return offers extremely rare potential."

The property was originally part of about 15ha of Housing Corporation land. Negotiations to buy it were started by the Takapuna City Council in the late 1970s and there were staged payments over several years.

When the sale was completed the bulk of the land was turned into Rosedale Park and the rest was used as the council's works depot.

Another 2500sq m was sold to an adjoining business in 1995 about the same time the council's maintenance department became a Local Authority Trading Enterprise called NSC Holdings Ltd and the property was transferred to the company.

A decade later, the council's works business had been contracted out to the private sector and the land was leased to a number of private tenants. It is now the base for two of the council's biggest contractors, Fulton Hogan on just over half the site and Belfinger Berger, which took over care of some of the council's pipes and infrastructure work.

Other significant businesses on the property include Holiday Outboards & Boat Storage and The Trailer Shop among the site's 10 tenants. Each tenant's lease expires on December 31 next year, but Farland says there is a possibility many will want to stay, generating on-going income for a new owner.

Four stand-alone council buildings covering 1900sq m will be left on the site - consisting of a 505sq m office block, 1052sq m workshop, 232sq m store and 117sq m truck wash. Farland says some of the tenants also have their own buildings on the site and these will be removed when their leases expire.

Bedford and Farland expect a lot of interest in the property. "It is a very easy property to own," says Farland.

"If a new owner renegotiates new leases with the existing tenants there is little in the way of management and costs. The main outgoings are the rates. There is no body corporate to contend with and no bad debts or rent arrears. It is a nice clean buy."

The property borders Rosedale Park and sits in the North Harbour industrial estate. It falls away quite steeply from the corner of Bush & Paul Matthews Rds, but Farland says this could be a benefit if undercover basement parking for a multi-level office development above is ever considered in the redevelopment mix.

Most of the surrounding land is fully developed with warehouse distribution centres, office parks and trade-based retail outlets.

The North Harbour industrial estate along with Mairangi Bay has 940,000sq m of stock.

The majority of the North Shore's new industrial developments in the past few years have been located in these areas as land has been plentiful until recently and sites have tended to be bigger than the more established Wairau Valley.

Bedford says CBRE has completed some significant sales in the area, including a 1.2ha site at 225-235 Rosedale Rd for $4 million, which equates to $310 per sq m.

A larger 4.07ha holding at 44 Hibiscus Coast Highway in Rodney sold for $9.1 million, equating to $225 per sq m and a 1.28ha site at 105-109 Albany Rd went for $3.55 million, equal to $288 per sq m.