6 Broken Hill, Kenepuru, comprises the foreground grassed land and lower right fenced area. Photo / Supplied
6 Broken Hill, Kenepuru, comprises the foreground grassed land and lower right fenced area. Photo / Supplied
A freehold industrial site due to be auctioned in Porirua next month is being billed as an ideal passive investment property.
The 4167sq m freehold site at 6 Broken Hill, Kenepuru, is being marketed by Tim Julian, Ben Taylor and Kieran Lennon of Colliers International, and is set to gounder the hammer on March 14.
Julian says the property has an 11-year net lease to Genesis Energy on a land-only basis. "This means the tenant is responsible for all site improvements and also pays all expenses; such as rates, insurance and maintenance," he says.
"The net lease arrangement enables the landlord to bank the rent without deduction. This makes it a genuine hands-off investment."
Genesis Energy pays $57,190 in annual rent to use the site as a depot for distributing gas cylinders around the lower North Island. The tenant may also install a 10-tonne LPG tank at a future date for re-charging smaller cylinders.
Taylor says the property is likely to be priced within a bracket that is accessible to a broad range of investors.
"It will probably be viewed as affordable by smaller-scale investors such as family trusts, individuals and small syndicates. It's expected to have wide appeal due to its long lease to a national energy corporation, zero-maintenance nature and good income.
"The annual rent is also subject to annual reviews against the consumer price index, providing built-in income growth."
Lennon says the Kenepuru industrial area is expected to benefit from major regional transport projects.
"New on and off ramps connecting Kenepuru Drive to State Highway 1 as part of the Transmission Gully project are due for completion in early 2020. This will improve access to Wellington, Kapiti Coast and the Hutt Valley."
Julian says the Wellington industrial market is still extremely short of lease stock and there is also a shortage of vacant land available for development.
"The high-demand, low-supply dynamic is an ongoing feature of the industrial market in and around Wellington. This is a positive scenario for landlords, who can expect further rent and capital growth over the foreseeable future."
