Otara properties’ retail, industrial cachet

5:00 AM Saturday February 25, 2017 True Commercial

The warehouse at 58-64 Lovegrove Crescent. Photo / Supplied

They are an industrial redevelopment opportunity at 58-64 Lovegrove Cres; and a property at 3 Watford St - neighbouring the Manukau Institute of Technology’s Otara campus and capable of delivering enormous retail and community potential.

The two properties are being marketed separately by sole agents Patrick Sammon and Lewis Watson, from CBRE’s South Auckland office.

They are both for sale by deadline private treaty, closing March 30, unless sold earlier. On sale, a month’s notice will be given to the tenants.

“At a time when the South Auckland market has rarely, if ever been hotter, commercial properties of this quality seem to have all but vanished,” says Sammon.

“They’re being offered to the market at a time when retail and industrial yields and rental growth are at unprecedented levels.

“Never before have we experienced such a strong market. With record rental growth and yields being achieved on quality investment opportunities, we expect further yield compression into 2017.”

Emerging when new industrial space is extremely hard to find, 58-64 Lovegrove Crescent represents a prime South Auckland redevelopment prospect, says Sammon.

“The existing warehouse building on a large 6515sq m site offers a total floor area of 1302sq m. Redevelopment potential seems obvious, however, it could easily be retained for interim rental purposes if required.

“With an accessible road frontage location, the site provides street presence and unimpeded access. Buyers and future tenants will also benefit from access to a strong local labour pool and amenities, including a shopping centre, retail outlets, motorway, petrol stations,” says Sammon.

Watson says the Industrial 5-zoned land and building is in a user-friendly industrial location, with convenient access to the city, the inland port at Wiri and all major other industrial precincts in South Auckland.

“As a sizable site, 58-64 Lovegrove Crescent offers immense potential for any owner-occupiers, developers and investors looking to redevelop.

“Less than a kilometre from the Southern Motorway’s East Tamaki Road off-ramp, it has efficient and largely unimpeded access to the motorway network. It’s also less than 5km from the industrial hub of Highbrook Business Park.”

Property and land values in established industrial hubs in Te Rakau Rd and Harris Rd have pushed upward dramatically in recent years, so this site offers an understated yet highly cost-effective solution.

RESIZED CBRE 3 Watford St TRUE COMM.jpg

No 3 Watford St is a character-filled building on a high-profile 762sq m site. Photo / Supplied

“Being in one of the last small enclaves of industrial-zoned land in Otara, industrial sites such as this present an increasingly scarce opportunity,” says Watson.

“We’ve seen recent purchasers in Lovegrove Crescent position themselves by land banking sites for future use in the area. The location is destined to become a key compact industrial zone of note over the next five to-10 years. It offers the same fundamentals as other more well-known hubs nearby but with better connectivity to major freight routes.”

Established occupiers in the area include Designer Textiles, Manukau Institute of Technology and Viking Group.

The property at 3 Watford St is a character-filled building — on a high profile 762sq m site that fronts on to East Tamaki Rd, in the Otara town centre.

Now home to a community training centre, the two-level 1172sq m property is close to a busy McDonalds, with a Jett’s 24-hour gym and a health centre as its immediate neighbours.

The 1980s building has a series of training areas and classrooms, training kitchen, lift and foyer.

The site benefits from great access, says Watson. There’s large scale car parking on its doorstep, plus the recent $2.1 million redevelopment of the Otara bus interchange and adjacent plaza.

“No 3 Watford St looks on to a strategic transport corridor. It has great visibility for the large volumes of traffic using the route as southern access point to East Tamaki and its working population of around 30,000 people.

“It’s less than a kilometre to the Southern motorway and on the doorstep of the Otara Campus of Manukau Institute of Technology and its several thousand student, so it has a ready catchment and, with little work, could be converted into a great retail offering, or continue to be used by community-based tenants.”

The property has long been as a focal point for the local community, having previously been a community policing centre.

“It is well-served by the Otara Town Centre car park, also home to the hugely popular Otara weekend market. With the increasing growth of the largely Pacific Island residential population, the value of the site and its prime location will only improve,” Watson says.

“This is one of the highest-profile locations coming into Otara. It offers excellent drop-in amenity and is near to a major bus interchange combined with new public space, which makes it a first-rate opportunity for investors, owner operators and developers.”

It’s no secret that land values have gained significantly right across Auckland recently, says Sammon.

“A perceived lack of industrial land supply has seen investors, developers and occupiers look to secure land for future occupation. Central precincts such as East Tamaki have experienced significant land value growth off the back of their connectivity to key infrastructure, plus closeness to fast-growing Eastern Auckland residential areas.

“The limited land opportunities in East Tamaki have brought increased interest in the Otara area, given its closeness to the industrial hub.”