A high quality industrial investment property in East Tāmaki is being offered for sale via CBRE at a time when investors are competing to acquire property in the highly popular warehousing sector.
8 Reg Savory Place, Auckland, is a well-located site featuring a high-stud warehouse and office facility leased to packaging manufacturer Forward Plastics for a 12-year term.
Bruce Catley, managing director of capital markets, industrial and logistics at CBRE, is marketing the property for sale by deadline private treaty closing on June 20 at 4pm, with colleagues John Bedford and James Appleby.
“There is currently very high appetite from the investment community for industrial assets, potentially more than for any other commercial property asset class. Combined with this property’s highly reputable tenant, long lease and location in one of Auckland’s most desirable industrial precincts, we expect strong demand,” Catley says.
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Despite the challenges investors are facing with the restricted availability and high cost of borrowing, investment capital is still actively pursuing opportunities and prime industrial remains one of the most highly sought after asset types, says Bedford.
“Investors continue to favour the warehousing sector, which has been subject to exceptionally high occupier demand in the aftermath of Covid. However as is the case in any market downturn, a flight to quality has resulted in prime, well located industrial and logistics properties being most desirable to buyers, and this site certainly fits the bill.”
The modern, 4,025sq m building is extremely well designed and constructed. It was originally built in 1997, with a significant extension completed in 2003. In addition to a large high stud warehouse, the facility also includes an additional plant room, offices and amenities, a covered loading canopy, yard and car parking.
The property has been occupied by Forward Plastics since September 2021, with the current lease term (dating from October 2021) generating net annual rental income of $602,698. Fixed annual rent increases of 2.5% are built in to the lease, along with market rent reviews every five years. The tenant also has the option to renew the lease for a further 10 years, giving a potential final expiry date of September 2043.
Forward Plastics is a New Zealand-owned company established in 1998 which specialises in sustainable and recyclable packaging solutions. Among its customers are well-known household and personal care brands including Ecostore, Health Basics, Only Good and Earthwise.
The high demand for industrial premises in Auckland has resulted in virtually no vacancy and steeply rising rents, according to CBRE’s latest research. Benchmark warehouse rents for prime facilities in highly sought-after precincts reached the $190-$200 per square metre range in the fourth quarter of 2022. The exeptionally low vacancy rate supports the market’s confidence in investing into the industrial asset class, Appleby says.
“Prime industrial is expected to provide investors with very attractive long term capital returns, with prime industrial market rents forecast to lift by nearly 35% between 2022 and 2026 according to CBRE Research’s projections.”
The facility occupies a 6,383sq m light industry zoned freehold site, benefiting from a road-front position at the end of a cul de sac in the south-eastern part of the East Tāmaki industrial area, says Bedford.
“The location gives convenient access to State Highway One for transit to Auckland CBD, Auckland International Airport and the greater South Auckland area. The property is also located very close to Te Irirangi Drive, providing an alternative arterial route.”
Improved transport links and proximity to central Auckland have resulted in significant growth in the East Tāmaki industrial precinct in recent years.
Surrounding 8 Reg Savory Place are high-profile occupiers including Häfele, Mico Plumbing and Healtheries. The wider precinct is home to many other national and international names including Fisher & Paykel, Fisher & Paykel Healthcare, DHL and Garmin.
- Article supplied by CBRE
