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Innovation inspires industrial investment

Innovation inspires industrial investment

A partnership between Auckland Council and New Zealand owned and operated Ecogas Limited has brought an opportunity for investors to purchase a fully modernised industrial facility with a 20-year leaseback in place.

The standalone property is set to be fully renovated and will undergo significant capital investment to ensure Ecogas can deliver a world class food waste treatment plant after being awarded Auckland Council’s 20-year kerbside food waste processing contract.

The property at 90 Hunua Road, Papakura is for sale by Deadline Private Treaty closing at 4pm on the 7th of April 2021.

Sitting on a 4,810 sqm freehold site with heavy industry zoning, the property is being marketed by Colliers’ industrial sales specialists Joshua Franklin, Greg Goldfinch, and Mitch Broderson.

Colliers’ Director of Industrial Joshua Franklin says this is a truly unique opportunity for investors.

“Industrial property is one of New Zealand’s safest asset classes and this property offering stands out amongst the rest due to its location in a high growth area and impeccable tenant covenant with strong lease terms.

“Ecogas offer an excellent tenant covenant with the added incentive of a triple net lease meaning all maintenance and outgoings are paid by the tenant.

“Returning $293,500 net per annum plus GST with annual rent increases and a 12-month bank guarantee in place, this really is an exceptional investment opportunity.

“The property itself is functional, freehold and underpinned by a 20-year lease with fixed increases to give investors further comfort and a first-class investment for any portfolio.”

National Director Greg Goldfinch says that such high-quality, enterprising tenants make for an exceptional investment.

“New Zealand owned and operated Ecogas is a new partnership between leading energy and waste companies Pioneer Energy Limited and Ecostock Supplies Limited.

“The companies have joined forces to deliver New Zealand’s first anaerobic digestive system that will take some 75,000 tonnes of household food waste and turn it into sustainable and renewable clean energy.

“This method of processing is one of the biggest innovations in waste that New Zealand has seen in many years and will have a real impact on our environmental footprint.

“Anaerobic digestion is already the preferred method of food waste processing around the world, and Ecogas’ processing methods follow successful models used throughout Europe and the USA.”

“Construction has begun on a new $30 million purpose-built facility owned by Ecogas in Reporoa that will convert the food scraps from around New Zealand into sustainable biogas and biofertilizer.

“The site at 90 Hunua Road will be a packaging plant for Auckland’s urban food waste before being taken to Reporoa to complete processing.

“The waste will be transported using construction trucks that would otherwise be returning to the region empty.

Goldfinch says Ecogas chose the Hunua Road site specifically for its location and functionality of the building and site.

“The South Auckland location will provide ease of access between Auckland and Ecogas’ Reporoa site in the central North Island.

“Comprising 1,462 sqm of net lettable area, the property is made up of 1,394 sqm of warehousing, 68 sqm of office, plus significant yard area that will include weigh stations.

“The building is a generic rectangular shape with the offices fronting the busy Hunua Road.

“The layout includes five roller doors and a stud height rising up to 9.4m.

“This design is what most industrial tenants in the area are looking for, and Hunua Road has the added benefit of only 30 per cent site coverage, providing owners with undercapitalised land area with ample yard space.

“Ecogas are investing in the property to ensure that it can house their business for the next 20 years and beyond.

“The building has been fully renovated to be fit for their use with features that are both specific to their business and desirable by a raft of occupiers.

“Investments by the tenant include an extensive HVAC system, fast acting roller doors with wheel washes, comprehensive stormwater catchment, as well as a rain garden and roof water retention system.

“They have also resealed the entire yard and strengthened the rear concrete, created a higher stud warehouse and repositioned roller doors so their trucks can drive through for maximum efficiency.”

Colleague Mitch Broderson, Associate Director in Colliers’ industrial team, says the Papakura location will really seal the deal for the discerning buyer.

“An already established industrial area, Papakura is a location that continues to flourish.

“It’s ease of access to motorways and placement within the ‘Golden Triangle’ of New Zealand’s major growth cities are among the key drawcards.

“Hunua Road is considered Papakura’s main industrial arterial and this address is exceptional at just 2.5 kms from Papakura township and 3 kms to State Highway One.”

“It’s clear to see the way that Auckland is trending south with developments such as Drury nearby, and continued investment in infrastructure in the area.

“Papakura is well positioned to capitalise on South Auckland’s growth and increased market confidence in the area has only been accelerated by the shortage of industrial land and buildings across South Auckland.

Broderson says that savvy investors understand that buying in a transforming location gives potential for growth as well as a safe return.

Developments in the wider area include Drury South Crossing, a 361ha master-planned, mixed-use precinct next to State Highway One.

Drury South will comprise 145ha of industrial and commercial land, 85ha of parkland and 45ha dedicated to a new residential community.

Another 51ha of residential and commercial development will also be added to Drury Township.

There are large-scale new residential developments nearby at Paerata Rise and Auranga that will ensure a large staff catchment is right on the doorstep.

The wider area has a forecast population increase of 30,000 residents in the next 30 years.

The proposed new Mill Road transport link and the Drury Train Station will amplify connectivity to the area.

Interested parties are encouraged to enquire today with the sole agents as investments of this calibre are highly sought after in the current market.

Related Experts

Joshua Franklin

Director | Industrial

Auckland South

Josh specialises in the Auckland industrial market, servicing both the leasing and sales. Josh has a particular focus on the East Tamaki, Papakura and Takanini regions where he has formed strong relationships with property owners, buyers and tenants.

Josh has been working in the industrial sector for 10 + years, he was previously a Director and minor shareholder at Knight Frank before joining the Colliers Highbrook team.

Notable recent sales: 

  • 259-265 Church St & 145/149 Captain Springs Rd, Onehunga - $34.4m
  • 52 Spartan Road, Takanini - $17.2m
  • 62 Allens Road, East Tamaki - $12.1m
  • 90 Hunua Road, Papakura - $7m
  • 47 Allens Road, East Tamaki - $5.68m
  • Lot 8, Drury South - $7m
  • 23 Ross Reid Place, East Tamaki - $4.55m
  • 3 Haliday Place (11 units),  East Tamaki - $8.5m
  • 3 Averton Place, East Tamaki - $5.1m
  • 83A Boundary Road, Papakura - $5.6m
  • Lot 18, Drury South - $11m
  • Lot 9, Drury South - $3.9m
  • 23-25 Highbrook Drive, East Tamaki - $6.3m 
  • 64 Boundary Road, Papakura - $6.55m
  • 9-13 Lorien Place, East Tamaki - $3.5m
  • 60 Allens Road, East Tamaki - $4.75m
  • 200 Mt Wellington Highway, Mt Wellington - $13m
View expert

Greg Goldfinch

National Director | Industrial

Auckland South

Greg specialises in the mid to upper end of the Industrial sale and leasing markets. He joined Colliers International in 2004, coming from a policing background. He quickly established strong relationships within the industrial market and has worked exclusively for the likes of Fisher & Paykel, The Warehouse, Freedom Furniture, Fletchers, NZ Police, NZ Guardian Trust, Goodyear Dunlop NZ Ltd and Mercedes-Benz to name a few.

Greg has been the lead broker on nearly all of the largest transactions in the industrial property market over the last ten years. Greg has completed three of the largest industrial sales ever in the New Zealand market. He is a regular top 10 broker for Colliers across NZ having transacted in excess of $6billion worth of industrial real estate in his time with Colliers.

In 2013, 2019 and 2020 Greg was awarded the Commercial and Industrial Salesperson of the Year Award by the Real Estate Institute of New Zealand and was runner up in 2018. Greg was Colliers International’s top salesperson in New Zealand across all sectors in In 2010, 2013, 2017, 2018, 2019 and 2020.

View expert

Mitch Broderson

Associate Director | Industrial

Auckland South

View expert