A “bite-sized” investment property in Auckland’s popular Mt Wellington industrial precinct has been placed on the market, offering the opportunity for individual investors to diversify into industrial property.
6 Hotunui Rd is being marketed by Andrew Hooper and Hamish West of Colliers International for sale by auction. It is due to go under the hammer at 11am on August 15 at 151 Queen Street, Auckland, unless it sells before the auction day.
The 1800sq m freehold property has a rateable value of $1.4 million, with a successful national business in occupation for the past six years. This combination of factors makes the property “everything investors tell us they are looking for”, says Hooper.
“With its $123,000 annual income return, we expect this property to appeal to a wide range of buyers, especially considering the scarcity of this type of investment and its dollar value. We’re not aware of many other comparable industrial investment properties in this price bracket available on the open market in South Auckland at the moment.”
The property is leased to Arneg New Zealand Ltd. According to Arneg NZ’s website, the company is a 100% owned and operated New Zealand business which supports users of commercial and industrial refrigeration around the country. While Arneg NZ is 100% New Zealand owned and operated, it has the benefit of being part of the Arneg World, with operations in 25 countries and manufacturing in 14, the website states.
Arneg NZ has occupied the Hotunui Rd property since 2006, and has over five years remaining on its lease term. Annual net rental income is $123,260 a year, backed by a personal guarantee. The rent is reviewed to market every two years with the next review due in October 2013.
West says the property’s location in arguably Auckland’s most desirable industrial area, combined with its functionality and size which is ideal for a large number of medium-sized industrial occupiers, means it should always be easy to let should a vacancy arise in the future.
“Mt Wellington is in constant demand among manufacturers, importers and distributors due to its central location halfway between Auckland’s CBD and port and Auckland International Airport,” he says. “It is a very tightly-held area with a short supply of properties, so those that do come onto the market are generally leased very quickly.”
Property
The property features a 556sq m medium-stud warehouse, constructed in 1986, with 441sq m of air-conditioned offices and amenity areas, making up a total building area of nearly 1000sq m. 26 off-street car parks are also provided on site.
The office component of the property has recently undergone significant refurbishment at a cost of around $170,000, Hooper says. “The offices now have a great modern look and feel, and have plenty of natural light due to the extensive glazing around two sides of the front portion of the building.”
The warehouse features roller door access and a hardstand yard to one side, providing space for truck and container movements.
John Bowring, Colliers International’s national auction manager, says the property presents a “unique opportunity”, being placed in a price bracket in which industrial properties with strong investment fundamentals are not commonly found.
“The bulk of property investments of this value are either unit title retail holdings or syndications. With investment property in such high demand among investors across all commercial property sectors at the moment, this freehold title should not be overlooked as industrial buildings of this size and quality are extremely scarce.
“This is a great little bottom drawer earner and a conservative investment holding for a wide range of investors seeking diversification.”
Location
6 Hotunui Rd is located on Business 5-zoned land in central Mt Wellington, next to the well-known Tip Top facility, West says. “The property is on a quiet cul-de-sac with excellent motorway access via the south eastern arterial and also State Highway 1 to Auckland’s CBD and south to Manukau.”
Mt Wellington is one of Auckland’s longest-established and most sought-after industrial areas, he says. “Mt Wellington is considered one of Auckland’s premier industrial areas, with excellent access to the motorway system and central Auckland,” he says. “The area is highly desirable among occupiers, with a number of major industrial developments accommodating both multi‐national and national occupants commanding some of the top industrial rentals in the Auckland market.”
Land values reflect the desirability of the area, with values at $350 to $400 per square metre at the moment, he says.
The property is located very close to Mt Wellington Highway which leads straight to the shopping and cafes of the Sylvia Park commercial hub, West says. On and off ramps to the Southern Motorway are also in very close proximity.
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