A property to put chips down on

11:44 AM Monday July 4, 2016 True Commercial

The 2.6ha food production site comprises three buildings, including the processing plant and cold store area.

The massive East Tamaki home of “Mr Chips” is on the market, with brokers pointing to solid long-term sale-and-leaseback investment potential.

The 2.6ha freehold property housing the business at 100 Kerwyn Ave, East Tamaki, comprises buildings with a total net lettable area of about 8770sq m.

It is being marketed for sale by Andrew Hooper, Greg Goldfinch and Paul Higgins of Colliers International and offers will close by 4pm on August 3, unless sold earlier.

Hooper says the strong parent company guarantee and attractive lease terms make the property an appealing bottom drawer investment.

“When it comes to key attributes property investors are looking for, this one’s extremely hard to beat.

“It combines a significant, high-profile land holding in a fast-growing, premier location with a well-known and established tenant leasing the property for $1.2 million net pa, plus GST.”

As a tenant, Mr Chips — the highly recognised potato product processing brand — has committed to a 15-year triple-net lease with two six-year rights of renewal, Hooper says.

“Triple-net leases are not overly common in New Zealand but the benefits to them are clear. The tenant is responsible for all outgoings, as well as keeping premises both weathertight and structurally sound, which is another major plus for prospective buyers.

“The new owners can be confident of a quality, passive commercial investment that could possibly extend for generations to come,” says Hooper.

Established more than 30 years ago, Mr Chips is a well-known New Zealand brand that was once listed on the New Zealand stock exchange, Hooper says.

“Mr Chips was incorporated in New Zealand in 1985 and is one of the leading processors of potatoes in Australasia, with a sound reputation for product quality and reliability of service in Australia, New Zealand, the Pacific Islands and some parts of Asia.

“In May 2008, a subsidiary of a US-based company acquired the business and — together with a number of minority shareholders — privatised the company, prior to it being purchased by Balle Bros in 2013.

“Balle Bros Group has evolved from a traditional cropping operation into a fully-integrated vegetable business including growing, transport, packing, marketing and distribution and new owners can take stock in the strength of the company’s guarantee on this property.”

The 2.6ha food production site comprises three buildings, including the original site, the processing building and the cold store area, Goldfinch says.

“In 2001, Mr Chips built a new state-of-the-art french-fry facility on company land adjacent to existing premises, enable the company to double capacity. Later, it built new cold-store facilities at the rear of the site, the addition of which made the 2.6ha property fully developed.”

The main building is a full production facility, including inwards goods and storage areas, with two-level office and reception areas at the front of the building, Goldfinch says.

“The second building is the most modern of the three and comprises food production and packaging areas, with offices and amenities over two levels, while building three is the main cold store storage area with a loading area as well as an adjacent sorting shed for inwards goods.

The property is currently zoned Business 5 under the operative District Plan and proposed to be rezoned Light Industry under the future Auckland Unitary Plan, Goldfinch says.

“Light Industry zoning provides for a wide range of activities, including workers’ accommodation, dairies, food and beverage offerings, offices and that are accessory to an industrial activity on site, storage facilities and show homes.”

It is on Kerwyn Ave amongst the Highbrook industrial precinct, Goldfinch says.

“The property benefits from huge road frontage and is positioned near a number of well-known businesses — including DHL, BMW and NZ Post, among others.”

East Tamaki is a well-established commercial location and Auckland’s most popular industrial suburb, Higgins says.

“The nearby Highbrook Business Park has seen significant development — as well as the Eastfield Industrial Park — and both are only increasing the area’s desirability, with other national brand tenants such as Fisher & Paykel, Steel & Tube, OfficeMax and United Industries nearby.”

Amenities in the area include The Botany Town Centre, which provides a wide range of goods and services, he says.

“The area has established and ever-growing residential catchment within a very short commute — providing ease of access to a skilled labour force as well as convenience for consumers and other local businesses.”

East Tamaki is in a key strategic location in terms of transport, Higgins adds. “The Highbrook Drive interchange — positioned a short distance to the west — providing effective links to the airport, port, CBD and other business areas within the region.

“Access to nearby industrial areas such as Manukau City and Mt Wellington is also within minutes, and the property’s access to the wider East Auckland region is superb.”