A premium manufacturing facility in Rolleston has been placed on the market, as investors scramble to secure quality stock in Christchurch’s red-hot industrial market.
Located at 53 Izone Drive, the 8000sq m warehouse and manufacturing facility is currently owned and occupied by leading nationwide aluminium joinery company FMI Building Innovation Ltd, which operates the Fairview brand in New Zealand (among others).
The property is offered to investors as a sale and leaseback with a 12-year lease in place, providing substantial annual income, fixed rental growth and the tenant covenant of a successful and growing national business.
CBRE and Savills are handling the sale of the property in New Zealand’s fastest growing urban area, with offers closing on May 15.
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CBRE associate director of investment sales Cameron Darby said the purpose-built warehouse facility was carefully designed and constructed to meet FMI’s long-term requirements for future-proofing the company’s manufacturing capability in the South Island.
“This leading-edge facility was designed and built for FMI by Calder Stewart, with the first stage constructed in 2010 and a significant extension completed in 2019.
"FMI is committed to this location for the long term, and will be taking a new 12-year lease with rights of renewal potentially extending the lease term to 24 years in total.”
Chad Greer, industrial sales and leasing director at Savills, said FMI has made the decision to sell the property and lease it back for the long term in order to facilitate additional manufacturing capacity nationally.
“FMI employs around 300 people in New Zealand and is currently planning stage two of its $100 million-plus property development in Mt Wellington, Auckland.
"This project will enable the company to step up its manufacturing capability in response to demand. FMI plans to deploy the proceeds from the sale of 53 Izone Drive into this development.”
Alongside Fairview, FMI also operates other well-known brands in New Zealand including Next Windows and Doors, Verto Raccordi and Eurowood.
Darby said the investment is expected to receive strong interest from investors, who are competing for prime industrial stock in a supply-starved market.
“This is an outstanding investment providing quality, contemporary manufacturing and warehouse accommodation, backed by a successful national tenant in a premium industrial estate.”
Christchurch’s industrial market remains a stellar performer, with virtually zero vacancy in prime grade buildings and substantial rental growth recorded.
CBRE Research’s latest vacancy survey showed prime industrial vacancy in Christchurch has fallen to just 0.1 per cent as at December 2023.
This extremely low vacancy, along with strong demand for prime assets, increasing land prices and high construction costs has resulted in rents growing by over nine per cent over the year to December 2023, reaching a new record of $136 per square metre, Darby said.
“Furthermore, the economic rents required for new build developments sit well north of this number - indicating substantial rental growth to come in the prime industrial market.”
The building includes high-stud manufacturing space, two levels of offices, multiple gantry cranes and several roller doors providing loading access.
Most of the facility was constructed in 2019 in a large-scale extension project which added approximately 5500sq m of warehousing to the original 2500sq m building.
The lease to FMI will generate $1,242,632 a year in net annual rental income, growing by three per cent a year through fixed rent increases.
Occupying a 1.4ha corner site in the 188ha Izone industrial park, the property is close to inland ports, the Southern Motorway and Christchurch Airport.
Continued high occupier demand has resulted in Izone, along with other prominent Rolleston business parks Iport and Tawhiri, being largely sold and pre-committed.
A further 98ha adjoining Izone was rezoned from rural to industrial in 2023 to support continued growth and demand.
Major occupiers who have committed to Rolleston and surround 53 Izone Drive include Lyttelton Port Company and Port of Tauranga’s inland container hubs, The Warehouse’s South Island distribution centre, DHL, Office Max, CODA, Woolworths, Move Logistics and Placemakers.
- Supplied by CBRE
