Profitable Penrose property pretty in pink
An aerial side view of the Pink Batts building alongside the southern motorway at 90 Holloway Place, Penrose.
Auckland’s distinctive Pink Batts building running alongside the State Highway One southern motorway is for sale for the first time in 17 years.
“The long, bright pink building has become a city landmark for travellers along a stretch of motorway that has also become a bottleneck,” says Paddy Callesen managing director of Savills who, with Greg Goldfinch of Colliers International, is marketing 9 Holloway Place for sale by private treaty closing on December 3.
Callesen says Pink Batts has been in the leased Penrose property for 55 years and has no intention of leaving soon.
“The private owners are in their eighties and are selling so ultimately the site can be redeveloped,’ he says.
During Pink Batts’ tenancy, the property has been expanded mainly for new plant to keep up with insulation demand. Pinks Batts is Australasia’s biggest producer of glass wool ceiling insulation and claims to have 55 per cent of the New Zealand insulation market.
Tasman Insulation, a subsidiary of Fletcher Building, which owns the Pink Batts trade name, has a lease on the property running until 2021 and two 10 year rights of renewal after that for the 21,868 sq m property.
The company manufactures Pink Batts 24 hours a day seven days a week from its 11,310 sq m factory for the domestic market. It also imports some of its product.
Callesen says new housing demand and changes to the Tenancy Act requiring all landlords to provide insulated houses by 2019 have boosted Pink Batts sales.
He says Tasman Insulation has spent $13.5 million over the past eight years converting its glass melter at the factory from gas to electricity and installing a wet electrostatic precipitator to deal with the particulates from the flue gas.
The property has a well-established industrial building, with a two level office block to the frontage at 9 Holloway Place and medium stud warehousing at the back.
Built with concrete foundations, brick and cedar cladding over concrete steel pillar structural framing, both office floors are highly partitioned, with internal access by two separate staircases.
The warehouse and manufacturing area is at the back of the offices and split into four interconnected bays, with a general 18.6 metre span between columns.
The frontage of the Pink Batts building in Penrose.
Steel framing rises to a five metre stud at the portal knee and 8.4 metres at the apex. The warehouse is equipped with fire sprinklers and has access through two loading docks at the front and eastern sides.
Goldfinch, Colliers’ South Auckland industrial sales and leasing national director, says the property is expected to attract strong interest from buyers attracted by a prime land site in one of Auckland’s most popular industrial suburbs and leased to a premium business.
“This is one of the best recognised industrial properties in Auckland. Opportunities to buy such a well-known building on New Zealand's busiest stretch of road, come about very rarely.”
Tasman Insulation is paying just over $1 million a year in rent, with rent reviews at the time of lease renewal every 10 years.
The heavy industrial property has a Business 5 zoning and under the Proposed Auckland Unitary Plan zoning it will be designated Light Industry.
Goldfinch says the quantity and quality of commercial development in the area has improved considerably in recent years making it a well-established and thriving precinct with ready access and exposure to Auckland’s motorway network.
The factory sits in an area surrounded by light industrial showroom and warehousing operations.
Bob Stevenson, who has owned the property for 17 years with a business partner, says it has been a good passive investment on one of Auckland’s highest profile industrial sites.
“The Auckland Pink Batts building could not be in better hands. Tasman Insulation gets good use out of its factory and it is close to Penrose rail station,” Stevenson says.
The property has a rateable value of $13.5 million.
Pink Batts was originally known as New Zealand Glass Manufacturers Proprietary which bought the Penrose land and built the factory about 1961.
A change of name to Alex Harvey Industries (AHI) came in 1970 and the property was sold to Colonial Mutual Life Assurance in 1971. Stevenson and his business partner bought the property from CML when the insurer moved back to Australia. “It was a good buy but we did pay market price at the time,” Stevenson recalls.
Paddy Callesen of Savills (left), and Greg Goldfinch of Colliers International (right).