Bottom-drawer Whangarei investment with add-value potential

A significant industrial property in Northland’s Whangarei has come to market, presenting an opportunity for passive investors seeking a solid bottom drawer investment opportunity with potential for future upside, brokers say.
 

Comprising a mix of buildings and extensive yard space spread across four freehold titles at 6-16 Union East Street and 6 Bougainville Street, Whangarei, the property – with a total land area of 13,471 sqm and total building area of 4,770sqm – is being offered for sale by deadline private treaty closing 4pm, 18 May, unless sold prior.

“This property would be suited to passive investors seeking a safe and solid bottom-drawer investment with the added potential of development,” says Matt Prentice of Colliers International who, with colleague Mike Ryan, is marketing the property.

“With four level and adjoining sites, it is a large land holding with comparatively low building coverage, which is further strengthened by a strong tenant covenant.

“Established New Zealand manufacturing company Hansen Products has been designing, manufacturing and distributing high quality pipe fittings and valves for over 60 years and has just signed a new 10 year lease in the property, returning $466,000 annually net plus GST.

“Hansen Products is a business that is not only well known in Whangarei, the wider Northland and nationally, but it exports worldwide to 13 countries – a great example of a New Zealand success story.

“The company is also a charitable community leader, highly regarded for sponsoring a range of different sports teams and individuals.”

The property itself provides future proofing for the business, Prentice says.

“With a number of large yard spaces, there is plenty of room for future expansion, and given Hansen’s track record this is not an unlikely proposition.”

The site at 6 Union East St is the north-western site closest to Kioreroa Rd, Prentice says.

“This industrial-zoned 3,744sqm site has a 550sqm functional office-warehouse, and the rear portion of the site is open, levelled yard currently leased on a monthly tenancy – which could be developed in the future.”

There are two buildings on the 3,744 sqm site at 10-14 Union East St, as well as extensive concrete and sealed yard areas, Prentice says.

The 3,697 sqm site at 16 Union St East features an office building that comprises offices, mezzanine lined areas, tool and assembly rooms and was originally constructed in 1994, with further additions in 1995 and a substantial upgrade in 1999, Prentice says.

“Meanwhile the 2,287 sqm site at 6 Bougainville St is a level property that has been cleared and finished with brown rock hardstand surfacing, with full security fencing installed.”

The property is located in an established industrial subdivision extending off Kioreroa Rd, Ryan says.

“The precinct is situation about 2km to the south-east of Whangarei’s CBD and 2.5km north-east of access to State Highway 1.

“Many of the sites in this subdivision are on leasehold land, while all four titles in this property are freehold – making it even more of an appealing investment.”
Further underpinning the strength of the investment is its location overall, Ryan says.

“The property has a wide road front position in a low vacancy area that is undergoing growth mode - Whangarei’s annual growth rate stands at 4.4% - higher than New Zealand’s overall growth rate of 3.9%.”

“This is likely to be further stimulated by the increase of ships tipped to pass through Northport at Marsden Point, as well as the four-laning of State Highway One between Whangarei and Auckland, due to be completed by 2022 and expected to increase freight transport as well as bring tourists and businesss to the region.”

Northland’s GDP was up 3.1% in the year ending September 2015, while business confidence rose in the October quarter last year to meet the New Zealand average, Ryan says.

“Employment increased 2.5% over 2015 to a new record high, while the average rent in Whangarei rose by $15 per week in November last year.

“The Government has also recently committed itself the area, announcing in February a 10-year plan called the Tai Tokerau Northland Economic Action Plan in February to attract investors and lift economic growth.

 “This has included a the recent pledge of $4million towards the Hundertwasser Wairau Maori Arts Centre project, which will see the conversion of the former Northland Harbour Board building in the Town Basin into an art and cultural centre based on a design by the late Austrian artist Friedensreich Hundertwasser, with the support of the Hundertwasser Foundation.”


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