Big Industrial Has Perfect Fundamentals

An East Tamaki industrial property with a long lease to an internationally listed company offers a ‘perfect set of investment fundamentals’, say brokers.

The property at 2-8 Jarvis Way, East Tamaki, is for sale through Greg Goldfinch, Paul Jarvie, Charlie Oscroft and Dwayne Warby of Colliers International, by deadline private treaty closing September 16, 2015, unless it is sold prior.

“When it comes to key attributes that industrial property investors are looking for, this offering is extremely hard to beat,” says Goldfinch.

“It combines a significant, high profile land holding with an extra-long lease and strong tenant covenant in a fast-growing location.”

The 25,946 sqm site is leased to container storage business Royal Wolf for at least the next 15 years. It is positioned in the rapidly expanding residential and commercial locality of Flat Bush-Ormiston, Jarvie says.

“This is an excellent opportunity for an investor to acquire a large parcel of prime land less than two kilometres from the Ormiston Bridge, which marks the main entrance to Ormiston Town Centre – one of the fastest growing suburban areas in New Zealand.”

Goldfinch says that given the property’s location, it will be considered a compelling land bank opportunity by many buyers. 

“The growth in this area means purchasers will view this as a land play with income - a chance to stake a claim to a big site in a location that continues to grow rapidly.” The tenant, ASX-listed Royal Wolf Holdings Ltd, is the market leader and industry specialist in the design, hire, sale and modification of new and refurbished shipping containers in Australasia. Its wholly-owned New Zealand subsidiary provides containers for a number of applications including storage and projects, for example the popular Re:Start container mall in Christchurch. 

Royal Wolf will take a new 15-year lease to the property on settlement, with the right to renew the lease for three further terms of six years each – providing a possible final expiry of 33 years from settlement. The current annual net rental of $715,000 is subject to fixed annual rent reviews, providing income growth, says Oscroft. 

“The strong covenant provided by the international listed company tenant, along with the extra-long lease and growing income stream, will mean this offering will be in high demand among investors – especially given the shortage of prime industrial stock in the Auckland market at the moment.”

The level, rectangular site contains 1,375 sqm of buildings. The main structures on site are three modern, adjoining storage warehouses where maintenance, refurbishment and modification of containers take place. Also on site is a large, partially-sealed yard used for bulk container storage, along with the Royal Wolf head office building.

Multiple vehicle access points are provided via the property’s three road frontages to Ormiston Road, Jarvis Way and Heritage Way.

The high profile Business 5-zoned site is ideally positioned on Ormiston Rd, says Warby. 

“Ormiston Rd is the primary link for East Tamaki through Te Irirangi Drive to Flat Bush and the continually-developing eastern suburbs of Auckland. Several major businesses have made this location their home; including Farmers which operates its distribution centre opposite the property, as well as Lion’s large headquarters and brewery next door.”

The nearby Ormiston Town Centre is being developed by Todd Property into an entirely new town, with the local population expected to exceed 125,000 people by 2031, says Goldfinch.

“The Ormiston Road area is expected to grow in conjunction with Ormiston Town Centre, which will be progressively developed between 2015 and 2022. The area is already a proven business location, with major amenities including Botany Junction and Ormiston Hospital servicing the growing local population. 

“Kirkpatrick Group has also just purchased 16 hectares of land on the corner of Te Irirangi Drive and Ormiston Rd which they are planning to develop – so there is plenty of momentum in this area.”

Other well-known businesses close by include Hynds Pipes and Wilson Concrete. 

Ormiston’s expected growth is set to provide a significant boost for property values in the surrounding area, says Jarvie. “Ormiston Road is expected to develop rapidly to accommodate ‘spill over’ businesses that will service the requirements of Ormiston residents and provide employment opportunities.”

The site has excellent access to the southern motorway via the East Tamaki Road and Manukau interchanges, a factor which has made East Tamaki one of Auckland’s premier industrial areas, says Oscroft. 

“With easy access to the nearby industrial areas such as Highbrook, Manukau City and Mt Wellington, as well as the airport and central business district, this is a very popular and desirable business location.”

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