Prime industrial sites on market
12 Southdown Lane, Penrose. Above: 126 Portage Rd, Otahuhu.
Two prime and well-positioned Auckland industrial properties in Penrose and Otahuhu have come to the market at a time when strong demand from occupiers has driven industrial vacancy to historically low levels.
Sam Smith, national director for JLL's industrial sales and leasing team, and colleague Ben Pilley are marketing the properties via a sole agency and expressions of interest.
Expressions of interest for a road frontage 7300sq m industrial building complex on a 17,500sq m leasehold site at 12 Southdown Lane, Penrose, close on Friday, October 24; the deadline for expressions of interest in a 4350sq m freehold property at 126 Portage Rd, Otahuhu, is Wednesday, October 29, unless either sells beforehand by negotiation.
Smith says the Southdown Lane property is strategically located off Great South Rd close to major routes including State Highway One and the southeastern arterial.
The complex is occupied by Owens Transport, a subsidiary of Mainfreight, on a lease earning $550,000 a year rising to $575,000 a year on December 31, 2015, for a further five-year term expiring December 2020.
Smith says the industrial complex includes the ability to access a rare rail siding option. The Owens transport facility is broken up into 4028sq m of warehouse space, 820sq m of office, mezzanine storage and amenities space and a large external yard area of 3200sq m. In addition to a 1633sq m semi-enclosed canopy, four more enclosed canopies provide for more loading and unloading space. The warehouse stud height is 6.10m rising to 8.93m, allowing for a variety of operations.
View of 126 Portage Rd, Otahuhu.
"The property's four canopies make this an ideal facility for a transport operation," Smith says. "With the availability of large industrial sites like this decreasing and a limited supply of stock coming to the market, we expect this property will be in high demand."
The property is Business 6 zoned under the Auckland Council District Plan which permits the site to be used for heavy industrial purposes.
The building complex is on a perpetual leasehold site with a term running until December 2026 with a 21-year renewal. The tenant pays the ground rent.
The second industrial site at 126 Portage Rd is described as "a highly practical premise with a sizeable yard" that is leased to AH Construction.
The property is on the southern side of Portage Rd close to Saleyards Rd and Great South Rd feeding into Mt Wellington and Otahuhu. Neighbours a include Bellingham Marine, Warren Fowler Earthmovers and Progressive Enterprises.
The 4350sq m freehold site encompasses a building area of 747sq m made up of warehouse and office space and earns $110,000 a year from a lease due for expiry in July 2019 with the exercise of a right of renewal next year.
Ben Pilley, associate director for JLL's industrial sales and leasing team, says the low site coverage provides a buyer with future development opportunities.
"The property is zoned Business 5 under the Auckland Council District Plan which allows it to be used for a range of mixed activities, including industrial and office use."
He says the Southdown Lane and Portage Rd industrial properties provide an excellent opportunity for a good yield differential over the costs of financing.
"Penrose and Otahuhu are 'consolidated industrial areas', meaning there is very limited supply becoming available to the market and the amount of investment stock currently available in these areas is low. Generally any stock that is available is of a smaller scale so properties of this size in these locations are highly sought after."
What's on offer
The properties: Two industrial complexes.
Locations: 12 Southdown Lane, Penrose; 126 Portage Rd, Otahuhu.
Sales method: Expressions of interest.
Deadlines: Friday, October 24; Wednesday, October 29 respectively.