Onehunga complex sale looms
A fully tenanted and refurbished warehouse and office complex in a popular Onehunga industrial area is on the market with a new four-year lease to a well-established manufacturer.
The property at 22 Patrick St is on a 1971sq m site, with a complex of three adjoining industrial warehouses and office space totalling 1276sq m.
"It is located in one of Auckland's most sought-after industrial areas and comes with a strong tenant covenant," says Hamish West of Colliers International who, with colleague Adam White, is selling it by auction to be held at 11am on July 8 at Colliers' Queen St office.
"It is being offered on a new four-year lease generating $154,844 per annum and commencing in August this year with a four-year right of renewal and 3 per cent annual increases," West says.
The tenant is manufacturer Webbing and Tapes REM, New Zealand's largest manufacturer of narrow fabrics. It has 30 years' experience in its market, along with a national and international customer base.
"With a mix of 1143sq m of warehouse space and 231sq m of office space, the property has a low office to warehouse ratio that is a desirable feature for re-tenanting in the future," says West.
"The property also offers plenty of parking and easy access for the trucks, plus a container set-down area."
The front of the building is well presented featuring a two-level facade with a brick base and multiple windows.
West says the property has been well maintained overall and there have been a number of recent improvements to the facade, front office and reception areas.
"Industrial property in Onehunga is very tightly held and investment-grade industrial properties of this quality and in this location are very scarce.
"The supply has not kept up with the demand, due to a lack of building over the past four years or so and there is very little land to build on in this area.
"Being part of the Auckland isthmus, Onehunga is constricted by large harbours and inlets on either side. The suburb borders the Manukau harbour to the south and residential areas everywhere else. The fundamental restriction of land supply is a factor that will support land values in the area over the long term."
White says the location is also one of the property's key advantages from an investment and a manufacturing and distribution point of view as it is only 11km from the CBD and 12.2km from Auckland Airport.
"The property is close to a skilled labour force in the nearby suburbs and has excellent transportation links, which will improve even further when Auckland's Western Ring Route is completed in 2017," White says.
"The property is in a Business 6 zone, reserved for a very wide range of industrial occupiers, including heavy and noxious use, with extremely good access to SH20 and great access to SH1 via Church St.
Now under construction, the Waterview Connection project will link SH20 with SH16 via a 4.8km, six-lane motorway, half of which will run underground, and create a direct motorway link between the central business district and the international airport.
"This property is only a few minutes' drive to the SH20 connection which will soon serve as an alternative motorway," White says.
Headquartered in Auckland, the tenant Webbing and Tapes REM has its manufacturing plant, operating more than 60 looms on site with a separate warehouse, showroom and sales offices in Mays Rd.
The company was formed as the result of a merger among three longstanding and respected New Zealand companies: Webbing and Tapes (NZ) Ltd, NZ Ribbon Manufacturers Ltd and Ribbon and Elastic Manufacturers - REM.
The company supplies a wide range of customers both locally and internationally, for uses in the marine industry, as well as window furnishings, clothing, transport and outdoor products.
It also offers custom designs and specialised orders, such as bindings for replica WWII uniforms and elastic webbing for roller doors.
"The company has a very long and successful history in New Zealand and is very committed to the continued development of its manufacturing base in this country," White says.
"With its strong customer base and thriving business, they make an ideal tenant."
"Having a quality tenant covenant and a well presented manufacturing facility in one of the best industrial locations in Auckland means this property will add serious value to a property portfolio as a passive investment," West says.
"We are expecting good interest in the property based on the bidding we have seen at recent auctions for fully tenanted industrial properties of this size."