Blue chip investment opportunity with huge upside

A massive industrial property comprising twelve separate buildings - predominantly leased to a well-established tenant - in one of Auckland’s fastest growing locations has come to market with wide appeal to investors.

Split over two freehold titles, the nearly 50,000 sqm site - featuring twelve buildings spanning more than 26,500 sqm - at 528-558 Rosebank Road, Avondale is exclusively for sale through Colliers International, with offers closing 3pm on Friday 18 March, unless sold prior.

Colliers’ National Director of Industrial Sales and Leasing, Greg Goldfinch who, with colleagues Dwayne Warby and Peter Herdson, is marketing the property, says it combines a significant landholding and strong tenant covenant in Auckland’s fastest-growing location.

“This is a solid industrial offering providing investors with the opportunity to acquire excellent buildings on a large landholding with diversified income streams.

“A key, underlying feature of the property is its long term conversion opportunity to bulk retail and ability to be subdivided into twelve separate titles, with the additional capacity to split the largest building into a number of smaller tenancies.”

The property generates an annual net rental income of $2.68 million, 70% of which is attributed to Etel Limited - a long-established, pioneering New Zealand business specialising in the design and manufacture of distribution transformers.

“Etel Limited was founded in 1956 as a specialised transformer manufacturer and distributor and has carved out a name for itself in the New Zealand, Australia and Pacific region,” says Goldfinch. 

Etel is owned by Unison Networks, a subsidiary of the Hawke's Bay Power Consumers' Trust.

Other tenants include a global supplier of hot runners, Mastip Ltd - a New Zealand company with offices in North America, China and Europe; pharmaceutical wholesaler Pharmacy Retailing (NZ) Ltd; point of sale software company Triquestra Ltd and Gloria Jeans cafe.

Goldfinch says the strong and diversified income stream will be attractive to many buyers.

“Investors are continually attracted to industrial property investments which are leased to multiple, strong tenants.

“Good industrial opportunities are in high demand from the investment community and the low interest rate environment looks set to continue for some time.

"Consequently, 2016 industrial yields may well continue the firming trend from last year, with buying opportunities very scarce for investors.”

The property, on the western side of Rosebank Road, is a large mostly-rectangular shape (apart from a sharply-angled rear boundary) adjoining an esplanade reserve with excellent views over the Whau River, Warby says.

“The majority of the buildings on the property have been built to modern specifications within the last few years using high quality materials.

“The largest building in the centre of the site was constructed in the early 1960s and boasts excellent character features.”

Currently zoned under the District Plan as ‘Business 5’, the Proposed Auckland Unitary Plan (PAUP) classifies the entire site as ‘Light Industry’, that provides for light industrial activities.

Warby says the location underpins this investment’s long term viability.

“West Auckland is Auckland’s fastest growing region, thanks - in part - to population growth and suburban sprawl as well as a lack of commercial and residential development land in central Auckland and the North Shore.”

The Rosebank industrial area in particular has become a highly sought-after business location due to its roading connections, Herdson says.

“The Waterview Connection will further enhance transport access to the area, providing occupiers with seamless north-south motorway access to Albany and Manukau and bypassing the CBD.”

“The Rosebank area is regarded as the closest industrial precinct to Auckland’s CBD – usually less than a 10 minute drive down the north-western motorway.” 
Herdson says the location comes with the additional business appeal of proximity to very large residential areas.

 “Ease of staffing is always an important consideration, and West Auckland offers the benefit of established and growing residential catchments within a very short commute of significant commercial zones like this one.”

Herdson says the Rosebank commercial and manufacturing precinct has undergone significant change in the last few years from large bulk industrial and manufacturing to a much more intensive and diverse business and retail profile.

“High profile brands include Cadbury’s head office and a new Bunnings Trade Centre - directly adjacent to this property – that’s been specifically developed to service the rapidly expanding trade business and demand growth in Auckland’s western suburbs.

“Other profiled brands nearby include Blum, a premium Austrian kitchen brand and Autex Industries – all serviced by well-known cafes such as Columbus, Kreem and Gloria Jeans.”

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