Two of the "sheds", known as the Dimond Buildings, sit at the southern end of the estate. The main tenant, Fletcher Challenge Steel Products (Dimond), holds a nine-year lease expiring on July 31, 2014, which generates $458,000 in annual net rental income.
The 3610sq m Lot 1 shed at 27c Cain Road sits on a 7300sq m site, while Lot 2 comprises a 3346sq m building on a 5400sq m site. Fletcher Steel has been a long-term tenant in both buildings, having occupied the site since 1975.
West says the original part of the Lot 1 building, with its 10m stud, was built in the early 1960s, while the lower 7m stud portion is more modern. "Further offices in front of the building were developed in the early 1990s," he says.
The rear part of the building has roller door access from both sides with rail tracks set into the concrete floor dating from the time there was a rail siding serving the area. The lower part of the property also has roller door access.
The second Lot 2 Dimond Building is also in two parts, the larger portion having been built in the mid-1980s with a more modern part attached to the northern side dating from the mid-1990s.
Fletcher Steel occupies the larger portion, which has a stud height at the knee of between 6m-10m. Roller doors give access from the southern side yard and from the front of the building. A small office is also on site.
The more modern part of the building has a good stud height and two roller door access points. The premises, which are vacant, incorporate an office and amenities area.
Tutill Carriers occupies the 1343sq m Lot 3 building on a 6300sq m site. Constructed in the mid to late 1980s, the building has a 7m stud height and incorporates an office, along with the main warehouse.
Tutill operates a 40-vehicle carrier fleet. It pays $127,366 a year in net rental income on a nine-year lease expiring on November 30, 2013.
Vodafone also has a cellular site on the property which accounts for a small portion of the rental.
Higgins says the properties are priced to sell and offer excellent potential. "For example, a buyer could intensify the development by building on the existing yard space."
He says the Penrose industrial sector is characterised by a shortage of sites available for development.
"As a result of the land shortage, businesses have focused on refurbishing or refitting existing buildings, or, in some cases, demolishing existing improvements to undertake a complete redevelopment."
According to Colliers, with the increase in demand from tenants for new and secondary stock, industrial vacancy levels in Penrose are between zero and minus 3 per cent and tenants are required to plan at least 12 to 18 months ahead in order to secure suitable premises.
"The majority of available land in the area has been soaked up and used for 'design-build' developments, with continued strong demand for developments expected in the year ahead," says West.
"The shortage of land has also resulted in redevelopment and refurbishment of old warehouse or factory buildings and better use of existing space for development."
colliers.co.nz
