The freehold lessor’s interest – being a substantial landholding in one of Auckland’s most desirable industrial precincts provides investors with a strategic foothold amid a scant supply of large-scale sites, Bayleys salespeople say.
The 1.2953ha site is located at 2-8 Maurice Road in Central Penrose, halfway between the Central City and Auckland International Airport.
Bayleys salespeople Sunil Bhana, Greg Hall, James Valintine, and Scott Campbell say the site benefits from a ground lessor’s interest structure and a covenant guaranteeing the ground lessee's performance.
“The property presents a genuine passive investment opportunity in every sense of the word, free of the capital expenditure that may hold investors back in the current economic climate.
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“Lessee ownership of the improvements on site, coupled with a recently reviewed long-term lease, provides an ideal ‘set-and-forget’ addition to investor portfolios,” says Bayleys South Auckland Industrial and Logistics director, Sunil Bhana.
Buying the lessor’s interest entitles a purchaser to receive the ground rent payable on the land under the ground lease, without being required to maintain or develop the buildings or other lessee’s improvements.
Bayleys South Auckland Commercial and Industrial associate director Greg Hall says the property features an initial ground lease term of 20 years, recently reviewed at $796,277 net pa.
Nine years remain on the current term, which includes 21-year perpetual renewals with market rent reviews every 10 and a half years.
“The lease term provides a stable and predictable income stream, attracting investors searching for an asset with low vacancy risk and a steady cash flow. Perpetual renewals mean the lease can continue indefinitely, offering investors long-term security in their investment.
“At the same time, because the ground rent is reviewed based on a highest and best use assessment, it ensures rental income reflects the land’s value and most productive use, ensuring that the lessor benefits from the property’s full economic potential,” he says.
The Bayleys South Auckland salespeople are marketing the property for sale by deadline, closing at 2:00 pm on Tuesday, 27th August 2024 (unless sold prior).
Predominantly west-facing, the property is positioned to provide 160m of frontage to Maurice Road with secondary profile to Station Road, a main arterial connecting Penrose to Great South Road and neighbouring suburb Onehunga.
Bayleys South Auckland’s James Valintine and Scott Campbell say the Business – Light Industry zoned landholding benefits from a premium position adjacent to Mount Smart (Go Media) Stadium, the Penrose Train Station, and the State Highway network.
“Penrose is one of the region’s preferred industrial precincts, given its convenient geographical location which provides easy access for business operations in all directions.
“It is a prime industrial precinct that continues to evolve, driven by its proximity to transportation hubs and the ongoing development of infrastructure across Auckland’s southern corridor. This makes Central Penrose a highly desirable location for industrial tenants, reducing vacancy risk whilst contributing to the property’s appeal as a predictable and strategically placed asset.
“This combination of the location, a long-term lease, and perpetual renewals positions the property as a compelling opportunity, providing both stability and growth potential without the hassle of day-to-day management – a particularly valuable commodity in today’s economic climate where capital preservation is paramount,” they say.
- Supplied by Bayleys
