Trio of big industrial properties with international tenant

A portfolio of three industrial properties is being offered for sale with two properties located in Auckland and Levin leased to a global paper and packaging giant.

The properties are for sale by International deadline private treaty closing Wednesday 28 September 2016 unless sold prior.

Two properties at 20 Mahunga Drive, Mangere, Auckland and 11 Tararua Road, Levin, with a combined rental income of nearly $3.5 million plus GST are leased to Oji Fibre Solutions (NZ) Limited (formerly Carter Holt Harvey) who have been operating out of both sites for more than 35 years.

The third property is a 13,280sqm vacant possession warehouse and office facility at 195 Browns Road, Wiri.

Colliers International National Director of Industrial Sales and Leasing, Greg Goldfinch is marketing the properties with colleagues Paul Higgins, Dwayne Warby and Peter Herdson. Goldfinch says the excellent tenant covenant and long lease terms of the Mangere and Levin properties and the add value potential of the vacant Browns Road property makes this opportunity a rare investment prospect in New Zealand’s tightly held industrial market.

The lease agreement for the freehold 41,981sqm Mahunga Drive property offers a remaining term of 9.33 years with two further five year rights to renewal. It provides CPI-based annual rental increases, with market reviews on 1 January 2019 and on renewal dates and returns $2,442,530.40 net per annum plus GST.

“20 Mahunga Drive property is a prominent, high quality facility which underwent major redevelopment in 2015, including a roof replacement of the main factory. It sits in a prime industrial precinct with major road infrastructure works just completed, excellent access to main arterials and the motorway network, and proximity to Auckland Airport,” says Goldfinch.

The property features a large footprint manufacturing facility originally constructed in the late 1960s by Carter Holt Harvey. The main manufacturing area provides highly functional medium stud space with excellent lighting.

Higgins says refurbishment of the warehouse and office and extension of the loading dock canopy has significantly improved the tenant’s all round efficiency. “The office refurbishment has produced a high quality modern space with excellent natural lighting. The ground floor is accessible from Mahunga Drive and comprises a high stud open plan reception and commercial grade kitchen with a canteen area,” he says. 

“The property’s three street frontages prove multiple access points. Rarely is an industrial asset of this nature offered to the open market,” he adds.

The Tararua Road property in Levin also makes for an exciting opportunity for investors says Goldfinch.  “The property consists of a 50,483 sqm freehold site with surplus land of approximately 10,000sqm, providing further expansion or development potential”.

There is 11.58 years on the current term with a further ten year right to renew. It offers 2.5 per cent fixed annual rental increases, with market reviews on 1 April 2023 and at renewal and returns $1,000,000 net pa plus GST.

The Levin property’s strategic geographical location sees the tenant’s packaging products distributed from Wellington to the south and as far as Mount Maunganui in the north. “The property is only two kilometres from Levin’s town centre, 76kms south-west of Wellington via State Highway 1 and 40 kms north-east of Palmerston North via State Highway 57. This is critical to their business,” says Goldfinch.

Oji Fibre Solutions (NZ) Limited was formed in 2015 as a joint venture between Oji Holdings, who is a major shareholder, and the Innovation Network Corporation of Japan. Oji Holdings is one of the largest forest, paper and packaging company in the world and is listed on the Tokyo Stock Exchange. The joint venture purchased the century-old Carter Holt Harvey Pulp, Paper and Packaging operation in 2015.

195 Brown Road, Wiri

Warby says the 31,223sqm freehold property at 195 Browns Road, Wiri offers a great opportunity for a buyer looking to occupy, invest or develop the site. “It sits on a prominent corner and is a large, well presented and highly functional industrial facility of 13,280sqm,” says Warby.

“Surplus land of approximately 7,311sqm is situated on the south east corner of Browns Road and Chonny Crescent, which can be developed or subdivided, a luxury in such a tightly held precinct,” he adds. Directly across the road is Countdown supermarket and associated retails shops.

The road frontages of approximately 192 metres to Browns Road and 148 metres to Chonny Crescent give workers convenient drive around access with exceptional access to main arterials, motorways and Auckland International Airport.

“It’s only three kilometres south of the Manukau City Centre, six kilometres east of the airport, and just 20 kilometres from the CBD, really boosting its value in terms of location. With easy access to both State Highway 1 and 20, only four kilometres away, it offers an exceptional logistical connection to wider Auckland,” Goldfinch points out.

The building is a clear span bay with a stud height of around 6.15m, at the portal knee rising to 8.2m at the apex. An extension adjoins the original warehouse to the north-west and comprises two bays being approximately 25m in length with a stud height of circa 6.2m rising to 9.2m at the apex.

Higgins says the two level office component to the south-eastern corner adjacent to the main carpark creates a convenient work area for staff. “Reception is on the first floor, along with partitioned office space, a boardroom, staffroom, and kitchen facilities. Additional offices are located on the ground floor,” he says.

“The opportunity to purchase large footprint industrial facilities are currently very rare with vacancy rates below 2 per cent and the added bonus of this site is the huge development potential of the excess land,” Goldfinch adds.

The property is zoned Light Industrial under the recently approved Auckland Unitary Plan, allowing for a range of industrial uses characterised by low to mediums intensity.

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