A massive Palmerston North distribution centre is for sale with a short-term leaseback to Countdown, allowing a new owner to draw on income while planning their next steps for the site.
The 3.47ha property at 2-12 Makomako Road has been placed on the market as Countdown prepares to relocate to a brand-new, larger facility on Alderson Drive near the airport.
The site benefits from a substantial 1.45ha of bare land that could be land banked, sold for additional income, or developed to occupy, sell or lease.
Countdown has exclusively appointed Colliers to market 2-12 Makomako Road, Palmerston North for sale by offers closing at 4pm on Tuesday 30 March, unless it sold earlier.
It is offered for sale with a 12-month leaseback from settlement, returning $1.2 million plus GST in gross annual rent.
This will provide short-term holding income for an occupier looking to secure new premises, or an add-value investor or developer looking to unlock the site’s huge potential.
The lease has no rights of renewal, providing certainty for a new owner looking to add value upon taking possession.
Andrew Hooper, Industrial Director at Colliers, says investors and occupiers are hungry for sites of this scale in regional growth centres.
“This is a substantial opportunity to secure a foothold in an industrial market that has seen considerable growth in recent years.
“Palmerston North is now well established as the major distribution hub for the lower North Island, and is also home to the national distribution centres for Toyota, EziBuy and Steelfort.
“With its convergence of roads, large rail goods yard and easy access to air transport, the city has undergone rapid recent growth in the warehousing, logistics, and distribution sectors.
“All of this development has resulted in a shortage of Industrial land, meaning higher values and firming yields.
“Despite this, Palmerston North still represents excellent value for investors who may have been priced out of the Auckland industrial market.
“The property for sale ticks all the boxes with its substantial existing improvements, established industrial location, and clear opportunity to add value.
“Whether you’re an owner-occupier, developer or investor, this could well be the regional industrial asset you’ve been looking for.”
The property comprises a 13,603sq m distribution facility with a 100 per cent IEP seismic rating. The improvements include an 11,637sq m high stud warehouse, 117sq m control office, 318sq m office, and a large 1,531sq m canopy.
The building is situated on a 34,686sq m freehold site, spanning two titles, which is essentially flat in contour. The site provides plenty of heavy duty sealed car parking and a yard area of some 5,454sq m, plus a 14,505sq m land bank ripe for development.
“The property is at the heart of an established industrial location that has seen considerable new development over recent years.
“The area is home to many substantial industrial premises focusing upon either distribution, transportation or manufacturing usage.
“The site itself is fairly regular in shape, located next to the intersection of Kaimanawa Street, Mihaere Drive and Makomako Road.
“Zoned Industrial, it boasts 187sq m of road frontage towards Makomako Road, with high visibility and exposure.”
Doug Russell, Director of Colliers Palmerston North, says the city is an excellent investment location.
“Situated at the heart of the Manawatū region, Palmerston North is a highly accessible centre that is within a two hour drive of a quarter of New Zealand’s population.
“The city has some 88,000 permanent residents and is also well regarded as an education centre, with a high population of tertiary students.
“The Manawatū region benefits from active promotion by the Central Economic Development Agency, a council-backed body that aims to bring people and business to the region.
“Alongside logistics and manufacturing, the region is a major agricultural hub that forms a key pillar of New Zealand’s dairy and meat industries, as well as a hub of food innovation and agribusiness research.
“In recent years, the region has also positioned itself as a business support hub, with a number of contact centres for government agencies and corporates now located in Palmerston North.”
The Manawatū economy has fared better than New Zealand as a whole since the Covid-19 crunch, with the region’s GDP declining by 1.8 per cent year on year in the September 2020 quarter, compared with 3.3 per cent for the country overall.
The Manawatū is also one of the key recipients of the Government’s Provincial Growth Fund, which will pump more than $150m into the region – making it the fourth biggest beneficiary in the country.
This includes $40m in funding for KiwiRail’s Regional Freight Hub near Palmerston North, which is designed to meet the needs of the Manawatū and surrounding regions for the next 100 years.
The property for sale will be leased back short-term to General Distributors Limited, part of Countdown’s parent company Woolworths New Zealand Limited.
Woolworths New Zealand is a subsidiary of Woolworths Group Limited – an ASX top-10 listed company that is the largest retail group in Australasia.
The company owns and operates over 180 Countdown supermarkets throughout New Zealand and is the largest private sector employer in the country, with 21,400 staff. Countdown serves more than 3 million Kiwis a week and has traded as an essential service throughout Covid-19.