The premises comprise an integrated industrial complex which incorporates offices, factory and warehouse space with stud heights ranging from five to six metres at the portal knee.
The southern portion of the building was refurbished 11 years ago including attractive new offices and a substantial drive through canopy, which was later enclosed to provide additional open warehouse space. The anchor tenant has expanded on the site over the term of their lease, now occupying 7486 sq m in total.
The northern offices were refurbished in 2007 for two other tenants, including Fairfax Media, with a new lift and upgraded courtyard area.
Wholesale importer Spring Furniture is the next largest of the tenancies in terms of both income and space. The company has occupied 1772sqm on the site since October 2006. Initially on a four year lease they have recently signed a new six year lease commencing May 2014 with two renewals of four years each at a rental of $129,100 pa. There is a market rent review every two years. The final expiry of the lease is in 2028.
"The combination of the two largest tenants provides more than 80% of the income for the property - about $743,400 - providing solid cash flow for a number of years and potentially long into the future," Hooper says.
Another well-known tenant is Fairfax Media which has occupied the site since September 2007. It is the largest integrated magazine and digital media company Australasia, with publications and websites across Australia and New Zealand. Fairfax Media's lease, which returns $78,236, will extend its lease for three years beginning September 2014.
The property is in the Business Activity 5 Zone under the Auckland City District Plan, which is characterised by low-to-medium intensity industrial activity.
"There are a number of features about this property that has attracted quality tenants," Hooper says. "The property has a park-like setting and huge amounts of parking for staff. While being close to two main motorway interchanges and just off a main arterial, the cul-de-sac location makes truck movements and access simple. Birmingham Road is located just off East Tamaki Road, an arterial route connecting traffic from the Southern motorway and the surrounding industrial area.
"The area is also improving rapidly, further increasing its desirability. This can be seen in the recent building activity, including the development of the substantial Lion Breweries head office and production site just up the road along with the new development of Botany South Town Centre and associated residential developments,. Additionally, Farmers is building a new state of the art distribution centre to add to their existing head office and warehouse facility adjoining the site."
"In recent years we have seen many of the heavy manufacturing facilities in East Tamaki being replaced by lighter industrial activity such as transport, logistics, warehousing. There are also more office tenants and social services, such as the church that has leased space in this building, that serve the growing residential catchment."
Prentice says the kind of tenants moving into East Tamaki need modern well-fitted out offices, clean warehouse space and more staff amenities than in the past.
"The functionality of the premises makes it stand out in this regard," Prentice says. "All the buildings have been extremely well-maintained, and have received quite a few upgrades over the years. The frontage of the property is nicely landscaped and the buildings present a neat, consolidated appearance. The courtyard in front has been upgraded to create an attractive, modern entry way with comfortable outdoor space for the staff to enjoy. The interior of the tenancies are fitted out to an excellent standard, with ample car parking on site and the opportunity to expand on these."
"The property presents an excellent opportunity to acquire a large landholding in a desirable district at a time when industrial property of this quality is scarce. This is underscored by the low vacancy rates in industrial property in Auckland, which at 3.4% are well below the 20 year average of 5%, suggesting the sector is in expansion mode. In East Tamaki space is even tighter, with vacancy rates having fallen below 3%, nearly the lowest in Auckland," Prentice says.
