A pair of large Mt Wellington properties put up for sale by Sky TV provide a premier purchasing opportunity and are set to attract intense buyer interest as vacancy rates reach new lows in the coveted central Auckland industrial precinct.
The two adjacent warehouse/office buildings at 16 and 34 Leonard Road, Mt Wellington, known as Studio 2 and Studio 3, are being offered for sale with short-term rental income as Sky rationalises its Mt Wellington campus. Sky is retaining its primary building, Studio 1, at 10 Panorama Road.
The two buildings are expected to be in hot demand among owner-occupiers and developers seeking a rare chance to secure a significant property holding in the notoriously tightly-held industrial hub.
“Prime vacancy in the Mt Wellington industrial precinct is now virtually non-existent, falling to 0.1 per cent in February from 1 per cent a year earlier,” says Greg Goldfinch, National Industrial Director at Colliers, which has been exclusively appointed to market the properties for sale.
“Mt Wellington continues to be one of the region’s best-performing locations for industrial property. Demand from tenants and investors consistently outstrips supply and the equation has tightened further over the past year with no immediate signs of easing,” says Goldfinch.
The two buildings for sale have a combined net lettable area of some 9,276sq m, with each combining medium-stud industrial space with well fitted-out office accommodation. The structures sit on separate cross-lease titles forming an approximately 81 per cent total share of the underlying 2.6-hectare title.
In addition to the obvious attractions for owner-occupiers, the Leonard Road sites are being lauded for their considerable development possibilities with short-term holding income, including the potential to create a mini office/warehouse estate or to explore rezoning for mixed-use projects.
The properties at 16 and 34 Leonard Road, Mt Wellington will be sold together or separately through Colliers by deadline for offers closing at 4pm on Tuesday 8 June, unless sold prior.
The sites for sale represent two of the three Mt Wellington buildings that have made up Sky’s Auckland headquarters and studio operations for many years.
Sky TV, who own the buildings, highlight the decision to sell will enable the company to act upon a rationalisation strategy that provides a better fit-for-purpose for their business and unlocks capital that can be redeployed into the business to create the most value for their customers and shareholders.
Goldfinch says each of the two buildings for sale benefits from extensive secure car parking areas and convenient dual egress points on Leonard Road which provide access to both sides of the property.
“The structure at 34 Leonard Road, Studio 2, was acquired during the Rugby World Cup 2011 to make room for broadcasters from all around the world, but changes to how people work mean it is now surplus to their current operations.
“The property is a well-maintained 1980s-built office and medium-stud warehousing building with a lettable area of some 2,911sq m.
“The original office area has an exposed timber-framed truss ceiling, with further office accommodation having been extended into the warehouse area. Office and amenity areas now total some 563sq m.
“The approximately 2,348sq m warehouse offers a stud height ranging from 5.8m to 6.9m. It has a concrete floor, precast concrete wall panels and a steel portal framed roof with profile metal roofing
“While the premises can be offered with vacant possession, short-term holding income is up for discussion.” says Goldfinch.
The larger 1970s building at 16 Leonard Road, Studio 3, offers some 6,365sq m of lettable space and is for sale with a short-term leaseback.
Goldfinch says the building is presented with a high-quality office fitout, having been converted in the early 2000s to expand office areas including the addition of a large, open-plan mezzanine floor. Ground floor office and amenities plus the mezzanine now make up the majority of the building, at approximately 4,378sq m.
“The warehouse of some 1,987sq m has a minimum stud height of 5.5m at the underside of the truss. Its construction features a concrete floor, profile metal exterior wall cladding and a lattice-truss roof structure clad with corrugated super six,” Goldfinch says.
The cross-lease plan sets out exclusive areas for each building as well as common areas which largely provide for sealed driveways and parking.
Todd Kuzmich, Industrial Director at Colliers, says the existing buildings automatically lend themselves to traditional uses including office, warehouse, distribution, storage or possibly community use.
“However, the location also offers exciting potential to explore alternative uses. Astute developers will consider the property’s possibilities for future mixed-use activities. Subject to rezoning, these could include residential projects or other alternatives such as retirement or education facilities.
“The short-term rental income available is extremely advantageous, enabling new investors or developers the time to plan for redevelopment or work to secure new, longer-term tenants,” Kuzmich says.
Hamish West, Industrial Director at Colliers, says a move to alternative uses could be favoured by the site’s positioning on the boundary between Mt Wellington’s industrial and residential zones.
The property is currently zoned Business - Light Industry under the Auckland Unitary Plan, providing for industrial activities such as distribution, warehousing and light manufacturing that do not generate objectionable odour, dust or noise.
Major business occupiers in the surrounding area include Fulton Hogan, Skellerup and Delmaine Fine Foods as well as the Countdown supermarket chain’s new 24-hour e-store.
Kuzmich says commercial and industrial property demand in the area continues to be driven by its central location, its proximity to Auckland’s central business district, port and airport, as well as key staff catchments.
“Mt Wellington also benefits from excellent distribution links via the city’s motorway network,” he says.
“Over recent years, Mt Wellington has grown in popularity as a residential and retail location. The Leonard Road sites are only about 2.5km from the Sylvia Park shopping centre. The retail precincts at Ellerslie village and Lunn Avenue are also nearby.
“The suburb is well served by regular rail and bus services and further transport improvements are coming on stream with the ongoing development of the AMETI transport project,” says Kuzmich.