A large cold store property in Mt Wellington, leased to multinational corporation Americold, presents a “significant investment opportunity”, according to the Colliers International brokers marketing the sale.
The property, on a 13,630sq m site at 20 Paisley Pl, Auckland, is being marketed by Greg Goldfinch, Andrew Hooper and Todd Kuzmich from the agency’s Highbrook-based industrial team. It is for sale by deadline private treaty closing on September 3 2015, unless it sells earlier.
“There is a chronic shortage of prime cold store property available for occupation in Auckland, and indeed a real scarcity of prime industrial space in general in Mt Wellington,” says Goldfinch. “Investors are therefore very keen for good opportunities in the Mt Wellington precinct, given the compelling supply and demand dynamics at play in the occupier market.”
According to Colliers International’s latest industrial vacancy survey, there is virtually no prime (A grade) industrial space available for lease in Mt Wellington (as at February this year), with the vacancy rate down to just 0.2%.
This property was purpose-built for the tenant, Americold NZ Ltd, in 1999. It therefore provides specialised plant, equipment and space that would be ideal for any cold storage operator, Goldfinch says.
“Given the scarcity of available cold storage premises in New Zealand as a whole and especially Auckland, facilities like this are expected to continue to be in demand among occupiers.”
Americold holds a lease to the property expiring on November 29 2019, generating net annual rental income of more than $1.6m. The potential for income growth is also included through regular market rent reviews.
Americold is recognised as the global leader in temperature-controlled warehousing and logistics to the food industry, offering warehousing, transportation and logistics services around the world. The company is based in Atlanta, Georgia and has large warehouses across the United States, Asia and Oceania, says Hooper.
“Americold has the largest cold storage network in the world with a total capacity of 1 billion cubic feet of storage. This makes the company a key component in the global supply chain connecting food producers, processors, distributors and retailers to the end consumer.”
In New Zealand, the company provides temperature-controlled food handling and logistical services to some of New Zealand’s best known consumer brands. They also lease neighboring properties making this facility a key component in their Auckland supply chain.
Cold storage facilities like this property play a key role in the food supply chain by ensuring that food is stored and distributed to retailers and consumers with minimal spoilage, says Kuzmich.
“As Auckland’s growing population places greater demands on food supply, the large-scale infrastructure required to efficiently store and distribute perishable goods becomes more and more important.”
The 9032sq m building houses a specialty cold/coolstore and distribution complex, with two levels of offices and staff amenities.
Constructed in 1999, it includes five cold store rooms, two blast freezers, loading area, container area, seven loading docks and associated plant and engine rooms, says Goldfinch.
“This is a substantial and impressive facility which includes specialised features such as rapid-opening doors and temperature-controlled ‘curtainside unloading’ truck docks. The coolstore rooms can also be used as either freezers or chillers.”
In total, the facility provides some 58,719 cubic metres of storage, Goldfinch says. “This facility offers large-scale purpose-designed storage and distribution capability, with the tenant planning to invest in further improvements to the site to the value of around half a million dollars later this year.”
The property is also fully integrated with an adjoining building on a neighbouring site which is also leased to the same tenant, says Hooper. “The combined sites deliver one of the largest cool store facilities in New Zealand – with significant economies of scale that would be difficult to replicate.”
The property is situated on the southern side of Paisley Pl, a small cul de sac within the industrial suburb of Mt Wellington. Paisley Pl extends from Gabador Pl which links to Carbine Rd, a main local arterial route. The Mt Wellington Highway, South Eastern Highway and Southern Motorway are all also within easy reach, says Kuzmich.
“This area’s excellent location and transport access means Mt Wellington has long been considered one of Auckland's premier industrial areas, with a central position between the CBD, port and international airport.”
Property in Mt Wellington is keenly sought after whenever purchasing opportunities arise, he says. “The suburb was one of Auckland’s first industrial areas and it continues to be a fantastic home base for many of New Zealand’s most well-known and established companies, with its popularity reflected in vacancy rates which are constantly low.”
Among investors, Mt Wellington is a very tightly-held area with a short supply of investment properties, so those that do come on to the market generally get snapped up very quickly, he adds.