Sales auger well for Upper Hutt
This property at 132 Whakatiki St sold with vacant possession for $1.2 million to an out of town transport business. Photo / Supplied
Several commercial transactions in Upper Hutt have signalled a renewed interest in the area among tenants, owner occupiers and investors, says Tim Julian, industrial broker in the Wellington office of Colliers International.
Julian says he and his colleagues have competed five significant deals in Upper Hutt over the past month.
Two properties were sold to investors, two to owner-occupiers and another was leased by a national logistics business for the construction of a purpose-built warehouse facility.
“These transactions represent a big step-up in activity in the Upper Hutt commercial market and reflect a range of factors - in particular local roading enhancements, a lack of vacant space in other parts of the region, and the active development of residential property in Upper Hutt,” Julian says.
“Given that Wellington, Lower Hutt and Porirua have extremely constrained supplies of industrial land – which Upper Hutt still has in relative abundance – the recent activity is likely to be just the start of a heightened level of activity in Upper Hutt over the medium term,” he says.
“We predict there will be a number of other sales and design-build developments happening in Upper Hutt in the near future in response to higher tenant and owner occupier demand. This will be exacerbated by the likely compulsory acquisition of properties in the area.”
Compulsory acquisition is proposed by Greater Wellington Regional Council at Melling for flood protection, as well as in and around Cornish St for the new Petone to Grenada link road. Between these two projects, some 60 businesses will be left needing to find new premises, says Julian.
Residential developments spurring on growth in the local market include projects at Kiln St, Silverstream and the former Wallaceville Research land, where infrastructure, including roading and services, is being developed.
The five recent property transactions are:
- 132 Whakatiki Street, Whakatiki Business Precinct – a property comprising 1150sq m of building area and on a 3383sq m site which was sold by Julian and Vince Southee for $1.2m with vacant possession to an out of town transport business which plans to use the property for its own needs. The buyer was attracted to the site due to it being right on the corner of State Highway 2 and just 25 minutes’ drive into Wellington Central. A further selling point was the upcoming re-routing of SH1 to Transmission Gully, which will bring the site closer to places north of Wellington than properties in the Lower Hutt Valley.
- 2 Jepsen Grove, Wallaceville - a warehouse property with a six-year lease in place which sold through Julian and Ben Taylor for $800,000 and a net yield of 8 per cent. The property went to a local investor who recognised the benefit of owning a modern building on a corner site with a longer than average remaining lease term, at a time when the industrial property vacancy rate is at historic lows.
- 31 Park Street, Maidstone - comprising 17sq m parcel of vacant parcel of land to the northeast of Mitre 10 Mega, Briscoes, Wellington Beds and Parapine ITM, and southwest of Zip Plumbing. Also sold by Julian and Taylor, the property forms part of the large parcel of land formerly used as a sawmill - while the new owner is using the site as a transport depot. Land on this site has sold at rising prices levels and this transaction saw the pricing exceed $200 per sq m.
- 17 Hildreth St, Trentham – encompassing 12 one-bedroom single storey flats, all tenanted and each on its own separate unit title. Julian and Taylor sold this for over $1.7m to show a gross yield of over 7 per cent. They say the new owner recognised the value of the location while the vendor, now based in Auckland, was pleased with the price and wished to reallocate capital in Auckland.
- Fliway has committed to a warehouse design build project at 410 Eastern Hutt Rd, Silverstream, with a long lease brokered by Julian and Kieran Lennon. The building will be about 3000sq m in size, with supporting yard of approximately 4300sq m, including parking. Julian and Lennon says Fliway recognised the benefits of upcoming roading changes, including Transmission Gully and the upgrade to SH58 (Haywards) - including an interchange - which will make the location even better connected. The developer, Building Solutions, expects to complete the building by March 2018. Fliway will be joining Elgas, which leased another portion of this site on a long lease and moved into the property earlier this year. Colliers has other tenants considering leasing proposals which, if concluded, will see the site completely occupied.
Tim Julian, Colliers International.