Commercial kitchen sector ‘powerhouse’
The property for sale at 54 Tidal Rd, Mangere, is roughly identified by a red border. Photo / Supplied
A multi-tenanted industrial property in South Auckland, one earning more than $350,000 a year, has been placed on the market for sale.
The property at 54 Tidal Rd, Mangere, has a mixture of office and warehouse space housed in two separate buildings, and features a total floor space of 3600sq m, on 7315sq m of land.
Bayleys sales agent Nick Bayley says its location in a highly desirable industrial area close to the airport, coupled with the strength of the leases, makes it a compelling proposition for investors.
“The Tidal Rd property offers a split-income stream from multiple, well-established tenants, including Southern Hospitality - one of the country’s leading suppliers and manufacturers of commercial kitchen equipment,” he says.
“The property, which is zoned Light Industry and has a capital valuation of $3.75m, generates $356,142 a year in net rental income, but there is potential for rent growth.”
Bayley and fellow sales agent Alex McNeil are marketing 54 Tidal Rd for sale by auction on March 7.
“The two buildings at 54 Tidal Road were built in the 1980s but have been substantially improved within the last three years. Work undertaken includes the installation of a new long run roof and refurbishment of the building interiors, with the property having a 100 per cent seismic rating,” Bayley says.
The larger of the two buildings has 50m of street frontage and 487sq m of office space split over two levels, a 2459sq m high-stud warehouse and three full-height roller doors.
The smaller building is situated at the rear of the property and has 61sq m of office space, a 579sq m medium-stud warehouse and two full-height roller doors.
A mixture of office and warehouse space is housed in two separate buildings. Photo / Supplied
Bayley says the property’s five tenants are long-standing.
“Anchoring 54 Tidal Rd is Southern Hospitality.
“It’s known for providing commercial kitchen equipment and design solutions for the hospitality and foodservice industry and has 15 showrooms nationwide.”
Southern Hospitality occupies the front building along with two of its subsidiaries, Project Stainless, which manufactures stainless steel products for commercial kitchens; and Project Mechanical, which specialises in commercial kitchen ventilation. The leases for all three expire on September 30, 2023, with an option to extend to 2026.
The remaining tenants in the rear building are two local businesses: Charity Clothing Collection, which collects and deals in second-hand clothing; and Windows 2000, which manufactures and installs windows and doors.
The leases for both expire on June 30, 2023, but Charity Clothing Collection has the option to extend to 2029 while Windows 2000 could go to 2026.
The front building also has 200sq m of vacant refurbished office space, allowing potential buyers the opportunity to grow their revenue stream.
Bayley says the property is well-placed to take advantage of tenant demand for industrial space near the airport.
The high levels of business and development activity in the area — known as Airport Corridor — have had positive flow-on effects for neighbouring suburbs such as Mangere.
“Mangere industrial precinct is home to a wide range of businesses, including some of the country’s largest freight and logistics operators, due to being close to Auckland International Airport along with links to the Southwestern motorway and other major arterial routes,” Bayley says.
“Recent roading improvements have also improved access to other major Auckland industrial precincts, including Wiri, Onehunga, Penrose and Mt Wellington.”
Bayley says the industrial property sector is enjoying a boom — and for many investors it is proving to more attractive than other sectors, such as office and retail.
“High levels of occupier demand are driving investor interest in industrial property,” Bayley says.
“Industrial vacancy in Auckland remains at historic lows of below three per cent, despite a ramping up of development activity in the sector. What additional space there is quickly snapped up.
“Upward pressure on rentals combined with yield compression has seen the industrial sector continue to provide strong investment returns, which are outpacing those generated by the commercial office and retail sectors.”