Huge new logistics complex at 9 Jerry Green St, South Auckland. Photo / Supplied
A company controlled by New Zealand’s wealthiest man has completed this year’s biggest leasing transaction on a new $100 million Auckland building.
NZX-listed Synlait Milk has leased a huge new Wiri warehouse storage and office building from billionaire Graeme Hart for its new southeast Asia plant-based export operation.
A Synlait spokeswoman confirmed the company had leased adjoining warehouses and offices with on-site car parks at 9 Jerry Green St, Wiri.
The property has 18,000sq m of storage space, 122 on-site car parks and ample truck turning space so containers can be packed and products hauled in and out of the huge buildings which have one vast open space within but are as tall as a five-level block.
But Synlait won’t use the entire building right away. It has sublet “a significant portion” of the space it is renting, planning to grow into it over time, the spokeswoman said.
The new venture is being viewed as a major diversification for the business.
CBRE’s Paul Steele leased the Hart buildings to Synlait in a transaction he completed solely. He couldn’t discuss it, saying he was bound by confidentiality.
Other agents said the warehouse contract is 2023′s largest leasing deal, expected to net Hart’s company around $5 million/year in rent but none of those details can be confirmed directly with Hart who rarely engages with the media. Nor would Fernbrook’s general manager Alistair White talk.
But Hart’s deals have the industrial property sector abuzz, watching him achieve so much and develop to green building standards.
Fernbrook Property (JG), owned by Hart’s Rank Group, owns 9 Jerry Green St, property records show.
Haydn & Rollett won the construction contract for the warehouses with a stud of 16.5m at the tallest points.
“This site is also advantaged by its proximity to the Ports of Auckland Inland Port and the Auckland International Airport Precinct,” leasing advertising says.
JG1 is a 7000sq m warehouse with 50 car parks, a 1120sq m breezeway and 400sq m office. JG2 is 11,000sq m of warehouse with 72 exterior car parks, a 4142sq m yard, 2155sq m canopy and 500sq m of offices, according to Fernbrook’s website.
As well, Fernbrook is developing another twin-warehouse base at 90 Pavilion Dr, Airport Oaks, Māngere.
All four buildings have extensive on-site car parking, breezeway areas and office space, needed for tenants to run efficient warehouse/logistics operations. The properties are designed for easy truck access and good traffic movements needed to move heavy freight.
Synlait is expected to truck products from 9 Jerry Green St to port facilities to export containers to southeast Asia.
Precisely what plant-based product it will store at Wiri remains unknown: if it might be soy milk or oat milk for a market with lactose intolerance ... no one is saying right now.
Hart has made considerable progress in the past few months as he turns his focus to his home city in what some observers believe are “lockdown projects”, hatched when our borders were shut during the depths of the pandemic, and people were unable to travel.
Hart’s eye has certainly been caught by the fast-expanding industrial or logistics/warehouse building sector.
Aerial images show the size and expanse of sites with new warehouses.
Across at 90 Pavilion Dr, a further two new buildings are up in a much sought-after location near Auckland Airport, also built by Haydn & Rollett, with a Green Star 5 rating, with 36 car parks, fully sprinklered, a high-stud clear-span international warehouse space with high-spec floors and offices.
These buildings are on land on the edge of the Villa Maria Estate, sold by receivers after the financial failure of the business founded by Sir George Fistonich. Hart’s buildings are PD1 with 8290sq m and a 420sq m office and PD2 which is 5200sq m with 317sq m of offices.
A third project is on its way. A warehouse of up to 12,340sq m on Cryers Rd won’t be available to lease until the middle of 2025.
The Fernbrook property development business building these warehouses has its own website - an unusual move by a Hart business.
“Fernbrook is a property company wholly owned by Rank Group, a family-owned New Zealand investment company. Fernbrook’s focus is the development and management of new-generation industrial properties. As well as developing buildings to its own high specifications Fernbrook undertakes design and build developments,” that website explains.
Property specialists CBRE released a report towards the end of last year which showed vacancy rates in the industrial sector “remained below 1 per cent”. That compares to a 16 per cent vacancy rate in non-CBD offices and 8 per cent for CBD offices.
JLL’s Q4 2022 industrial market snapshot showed just what a winner Hart’s business picked.
“South Auckland prime industrial rent increased by 5.6 per cent or $10/sq m and secondary space increased by 3.5 per cent or $5/sq m. Natural competitiveness in the sector due to occupier demand, limited new stock in the pipeline and increasing yields will continue to drive the performance of industrial assets into 2023,” JLL forecast.