Bell's Tea pot of properties
Two large East Tamaki properties which produce more than three million tea bags a day are part of a portfolio of Bell Tea industrial properties that have been placed on the market in a corporate divestment sale.
Bayleys Real Estate has been appointed to sell the properties, which encompass Bell Tea & Coffee Company's main production plant and head office at 43 Crooks Rd East Tamaki; two adjoining properties at 305 and 317 East Tamaki Rd; and Bell Tea's former Dunedin factory and warehouse at 15 Hope St. They are being offered for sale individually by international tender closing on August 7 although it is also possible to tender for the whole portfolio.
Paul Dixon of Bayleys Auckland is marketing the three East Tamaki properties with Chris Bayley and says each is being sold with new 12-year leases plus rights of renewal which, if exercised, would extend their tenure through into the 2030s.
"These are exceptionally long lease terms for industrial premises which, coupled with their strong location in one of New Zealand's most sought after industrial precincts, make them a very compelling investment opportunity," says Dixon.
"They are also very well-presented and maintained buildings and all three leases have built-in rental growth provided by annual Consumer Price Index rent adjustments with market reviews every three years."
The largest property on offer is the 5463 sq m Crooks Rd premises, purpose-built in 2008 as a state-of-the-art tea and coffee production facility. It is currently producing net annual rental income of $630,080 on a 12-year lease to Bell Tea & Coffee Company from October 2013 with three four-year rights of renewal.
The building provides high-quality head office accommodation with associated amenities, together with high stud warehousing of 12 to 13 metres. A canopy extends approximately 11 metres out from the warehouse and provides cover to four roller doors,
The complex was designed by architects Wingate+Farquhar with glass walled tea and coffee tasting rooms as its centrepiece. It incorporates a fire alarm system and sprinklers throughout the building, together with a security alarm system and a 25,000 litre rainwater collection tank.
The complex is located on a 1.3745 ha site on the corner with Blackburn Rd, with approximately 4000 sq m of bare land not currently being utilised, says Dixon. "This provides for the possibility of future expansion of the existing building or an entirely new development. The site has a sought-after Business 6 zoning which permits heavy industrial activities."
The property at 305 East Tamaki Rd, East Tamaki comprises a 4175 sq m industrial facility on a 6052 sq m site. It is generating $359,781 net per annum on identical lease terms to the Crooks Rd property.
Dixon says this was formerly Bell Tea's main Auckland production plant which was substantially renovated in 2007 and remains a significant production, storage and distribution facility for the Bell Tea operations.
Originally constructed in the 1960s with subsequent additions and refurbishments in 1976 and 2007, the complex provides medium to high stud warehousing and associated offices, plus extensive mezzanine areas which incorporate a staff lunch room and deck area. The balance of the premises provides medium and low-stud storage.
Next door at 317 East Tamaki Rd, a 1750 sq m industrial building on a 3035 sq m site is producing net annual rental income of $170,000. It was originally acquired to facilitate possible expansion of the neighbouring Bell Tea plant but it is being sold with a 12-year lease in place to Eagle Wire Products dated from November 2013 with two three-year rights of renewal. Incorporated in 1952, Eagle Wire specialises in the design and manufacture of wire products, including display systems, wire components and industrial wire products.
The building has three areas of warehousing, each offering 25-metre clear span accommodation, with a stud height of 4.55 metres at the portal knee, rising to 6.6 metres at the apex, plus office accommodation located at the road frontage with a high level of exposure to large volumes of traffic passing along East Tamaki Rd. This is a major arterial route, providing a transportation link from the East Tamaki industrial area and surrounding suburbs to and from the interchange with the southern motorway.
The Dunedin property is for sale with vacant possession through Robin Hyndman of Bayleys' Dunedin office. It comprises a 2623 sq m four level processing and warehouse facility plus an adjoining single level warehouse, load out area and an additional warehouse.
It was built in the early 1920s and added to in the 1950s and 1980s. The property is on a 1428 sq m corner site just south of Dunedin's CBD. "It's one of Dunedin's iconic buildings and while it requires seismic upgrading it offers a number of potential add-value opportunities including residential conversion." The Bell Tea brand was established in 1898 by Norman Harper Bell who was in the tea industry in Melbourne but moved to Dunedin in 1894. The company produced all its tea from its Dunedin base, with warehouse depots around the country, until the 1970s when it established a factory in Auckland and also started producing tea bags.
Bell Tea has more than 40 per cent of the total New Zealand tea market, producing more than three million tea bags on average a day and has an annual turnover of around $60 million.
It also owns Burton Hollis, one of New Zealand's first gourmet coffee roasters, Gravity Coffee, Jed's Coffee, Burton's and NZ Live, as well as espresso machine brands Jura and La Cimbali and has been sole New Zealand agent for Twinings of London.