Mt Wellington complex is a cool deal
Exterior elevated view of Mt Wellington cool store for sale at 785 Great South Rd.
A Mount Wellington cool store that has been purposebuilt for its long-established tenant Goodman Fielder, which pays $475,000 in annual rent, is up for sale.
Built in 2000, the freehold 2905 sq m cool store development occupies a 7565 sq m rear site at 785 Great South Rd in the highly sought after industrial location of Mt Wellington.
Goodman Fielder uses the site for milk and dairy produce distribution and signed a new 10 year lease in 2010 with two six-year rights of renewal for the modern, high stud chiller complex with parking for 52 vehicles and a redundant rail siding.
For sale by private treaty closing on November 26 through Savills joint managing director Paddy Callesen and his colleague Bruce Webb, the property is likely to sell well below replacement cost.
Callesen says the property is in a market where there is a shortage of chiller space. “The capitalised value in relation to land value and costs is extremely attractive.”
The lettable area of the complex comprises of 157 sq m of offices, 1800 sq m of cool store, 370 sq m of environmental load out area, a 502 sq m rail load out area, a 343sq m loading platform, 289 sq m of canopies, 960 sq m of yard and parking, 66 sq m for plant and services and a 35 sq m deck.
The offices are part of the main building at the north western corner. “Given the size of the property, they are minimal and of good quality, but have no prominence,” says Webb.
Bruce Webb of Savills.
The coolstore and warehouse is divided into five distinct areas. At the northern end is the environmental load out area consisting of five loading docks. Immediately behind the docks is the large central cool room. Webb says it has a stud of 8.2 metres and operates at a temperature of 4C. Doors to the rear open to the southern covered loading dock, which extends to a raised loading area.
To the west of the coolstore is a lean-to roofed warehouse with a stud of 4.2 metres, incorporating the disused rail siding. To the east is an extension build in 2007 carrying a lower stud coolstore, separated and secured away from the main coolstore.
Webb says the property has concrete foundations and floors, steel frame, polystyrene sandwich panel warehouse walls, galvanised iron roof and is in sound condition for its age.
“Although this is a substantial coolstore complex, it takes up only 43 per cent of the total land area when the primary site of 7565 sq m is combined with a one third interest in a further 1675 sq m of freehold land owned by the vendor. This a valuable redevelopment site in the long-term.”
Zoned Business 6 under the Auckland Operative Scheme, the site will become light industry under the proposed Auckland Unitary Plan, providing for a wide range of lighter industrial uses.
Callesen says although many people will see limited demand for the premises given its specialised nature and the scale of the development, that is overcome by its quality.. “It will appeal to the refrigerated freight industry as well as food processing companies if Goodman Fielder ever leaves the property.
“An astute investor will see the right fundamentals for successful investment – an international tenant on a long lease in a purpose built property, with three yearly rent reviews and future development land.”
Callesen says Mt Wellington is a popular area for investors and owner-occupiers. “It is one of the more established industrial areas in Auckland. Development started post-WWII and has continued by way of both new buildings and redevelopment of older properties.
“The redevelopment of brownfields sites is a result of pressure for new premises in a sound location, such as Mt Wellington, and this has grown markedly in the past decade.”
Callesen says the industrial market has surged ahead in the past couple of years driven by Auckland and Christchurch providing the uplift with low yields, rising leasing activity and rental rates plus growing land sales.
At the end of last year 100,000 sq m of new builds and redevelopment was in the pipeline, most of it in South Auckland.
Auckland Council’s Capacity for Growth document shows almost 70 per cent of Auckland’s business zoned land is industrial and half of the land is capable of future development is in South Auckland.
Bruce Webb Of Savills.
Callesen says Great South Rd has proven to be continually popular as an industrial address on a sound main road location. “It forms part of a wider, popular Auckland central industrial area. Many businesses use their exposure to passing traffic to advantage with the incorporation of showrooms or semi-commercial activities.”
Webb says Mt Wellington is particularly well located for services, amenities and the Southern Motorway close by at the Mt Wellington interchange. “It is handy to an established labour supply from the surrounding Otahuhu, Penrose Mt Wellington, Onehunga and One Tree Hill suburbs.”
He says prices for Mt Wellington industrial properties have firmed to the extent that the pre-2007 level has been restored for good quality functional buildings. “This has been given impetus by tenants buying their own buildings, reducing the number of properties for sale.
“A lack of stock on the market means rental rates have firmed, although rents tenants can afford is limiting rental growth. Cost of construction and land values makes the purchase of existing stock, even at low yields, reflect prices at below replacement costs and therefore good buying.”
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