An industrial property investment opportunity in Otahuhu has been placed on the market for sale, offering a secure holding backed by an international tenant on a long lease.
21 Huia Rd, South Auckland is currently tenanted by arboriculture and tree maintenance company Treescape, which holds contracts with councils, major power networks and other customers in Australia and New Zealand. Treescape has leased the property for a new eight-year term dating from July 2012.
The 1.4ha property is being marketed by Hamish West and Paul Higgins of Colliers International and is for sale by deadline private treaty closing at 4pm on Wednesday October 31, unless it is sold prior.
The property offers all the makings of a secure, passive investment, West says. “Excellent investment fundamentals including a strong tenant covenant, long lease and good income stream are all in place. The property is also low maintenance, being made up of a relatively small building component and a very large yard.
“We expect it to appeal to a number of buy-and-hold investors such as high net worths, trusts and property syndicates,” he says.
Property & tenant
The property comprises a level, regular-shaped Business 5-zoned site, with a 1625sq m office and warehouse building offering functional and modern industrial accommodation, says Higgins. “The clear span warehouse is of tilt slab construction and has two six-metre high automatic roller doors and a high stud of 7.5 metres at the portal knee,” he says.
Offices and staff amenities over two levels are positioned at the front of the building, providing both open plan and partitioned office areas. The site also provides off-street car parking and drive-around truck access.
Three lease renewal terms of five years each are available to Treescape, giving the potential to extend the initial eight-year term. The annual net rent of $357,100 is reviewed to market every two years, giving potential future income growth.
Two of Treescape’s founding directors have had a majority ownership of the site since 2003 and base their head office and main working yard at 21 Huia Rd, says Higgins. “The New Zealand-owned and operated company has been in business for more than 30 years and today employs over 400 trained staff covering the entire country as well as operating in Australia.”
Its customers include councils, utilities, government agencies, construction companies and developers.
Huia Road is located between Great South Road and Saleyards Road in Otahuhu, an established suburb of south-east Auckland which incorporates both industrial and residential areas, says West.
“This part of Otahuhu is a long-established industrial precinct which continues to prove a popular location for small to medium-sized businesses, which appreciate the close proximity to main arterial transport routes.”
Well-known national and international brands have recently set up distribution centres in Otahuhu, including L’Oreal, Fonterra, Supercheap Auto, Konica Minolta and USG, he says.
The property is just off Great South Rd and only one kilometre from the Princes St interchange to the Southern Motorway, allowing road access to both the Auckland central business district to the north and Auckland International Airport to the south in around 20 minutes each way, Higgins says.
“This motorway access means this part of Otahuhu is closer to the motorway than many other industrial areas in Auckland, and substantially enhances accessibility to this industrial area for workers, customers and transport providers.”
Industrial market positive
The sale comes as Colliers International’s latest quarterly confidence survey reveals investor confidence in Auckland’s industrial property market is high.
Alan McMahon, Colliers International’s national director of consulting and research, says 36 per cent of Auckland respondents forecast improving conditions for industrial property investors over the next year.
“This net 36 per cent optimism in the Auckland industrial market is slightly down on the net 41 per cent recorded a year ago, however it is still the highest level of optimism of any of the sectors and shows robust improvement from only five per cent optimism two years ago.”
Auckland industrial vacancy remains unchanged at 5.1 per cent over the year to August 2012, according to Colliers research.
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