Amid high demand from owner occupiers and investors seeking Auckland city fringe property, a large site has come up for sale in sought-after Eden Terrace.
1A Porters Ave, Auckland, is a 3371sq m property that was previously a butter packing factory. It is on the market for sale by tender closing December 7, 2016, through Peter Kermode, Jonathan Lynch and Josh Coburn of Colliers International.
The freehold, mixed-use zoned property is currently owned and occupied by exhibition, trade show and trade display services provider Peek Corporation. The company will take a short-term lease to continue to occupy the property for between 12 and 24 months, generating around $416,000 in net annual rental income, says Kermode.
“Peek Corporation is relocating to another site because the buildings at Porters Ave no longer suit their business requirements. This opens up a tremendous opportunity for an owner occupier or investor to secure a large land holding on the Auckland city fringe.”
The property’s size, central location and history makes it unique, Lynch says. “This has to be one of the more interesting properties we’ve come across in Eden Terrace, with its history as a butter packing plant.”
There are many possibilities for the site’s future given its large size and mixed use zoning, Coburn says. “The property lends itself to splitting into two tenancies – one upstairs and one down. Both tenancies would offer ground level access and a mix of office and warehouse components.”
This feature broadens the buyer market to smaller owner occupiers, who could opt to take 1200sq m of space (or more) for their own use and then lease out the balance to create an income stream, he says.
Kermode says the demand for city-fringe property among owner occupiers and tenants is growing, with a marked increase in the popularity of commercial properties in Auckland's inner circle of city-centre suburbs over recent years.
“There is no shortage of demand for commercial properties in good locations near the CBD. Because of this we expect this large property to attract a lot of interest from potential occupiers and investors.
Business owners know that a location close to the city centre can offer many benefits, with mixed-use zoning and double Grammar zone location added advantages which open up future options for residential development, says Lynch.
“A central location cuts transport costs and time for companies which service the CBD, and can also help businesses attract and retain staff. Smart business owners also have an eye for potential future upside – they might buy a commercial property and run their business from it for five or 10 years, by which time it could well be ripe for redevelopment into apartments.”
The potential for an apartment development is strengthened by the site’s uninterrupted and protected views to the Waitakere ranges, as well as its location 200m from Mt Eden Train Station, he adds.
The increased demand for city fringe warehouse space is resulting in supply constraints increasing, Coburn says. “There are few opportunities to increase the supply of city fringe commercial properties to meet demand, so properties like these tend to get snapped up.”
The site's mixed use zoning and its location near Mt Eden station sets it to benefit from development associated with the City Rail Link project, he says.
“There is a big increase in the construction of apartment, office and showroom developments on former light industrial sites in this area and we expect increases to both land values and rents as a result of the rail link.”
The site, which is bounded by three roads and the railway line, provides net lettable floor area of 2,760sq m and 28 car parks. The building, which was originally constructed in the late 1960s, was originally occupied by the New Zealand Co-operative Dairy Co and is thought to have been converted to its present use in the mid to late eighties. Further alterations were undertaken in the early to mid-1990s.
The building, which is of extremely solid construction and provides a very high floor load capability, provides various high-stud warehouse and workshop areas along with well-presented offices, amenities and an open-air roof terrace on the upper level.
The property, which has dual road access, is located 3km from downtown Auckland and equidistant from Newmarket and Grey Lynn, providing easy access to the CBD and other key suburban business hubs, Kermode says.
“This property is perfect for businesses looking to move in and take advantage of a location close to the village centres of Mt Eden and Kingsland, cafes, supermarkets, schools, Mt Eden Station, arterial roads and the motorway network.”