A large, heavy industry-zoned yard property in Wiri, leased to construction giant Hawkins, is on the market for sale, offering a passive industrial investment with the opportunity for future development.
Paul Steele and Claus Brewer of CBRE’s Auckland industrial and logistics team are marketing the 8,248sq m site, which is for sale by deadline private treaty closing at 4pm on May 25.
Positioned directly opposite Wiri Inland Port, the property will be considered a prime industrial investment due to its high profile location onto Wiri Station Road, superb tenant covenant and options for the future, says Steele.
“5 Ash Road is in an ideal industrial location well-serviced by road, rail and air transport in one of Auckland’s most highly sought-after business precincts. Leased to leading construction company Hawkins, which is in turn 100% owned by ASX-listed Downer Group, this is a significant opportunity to acquire a low-maintenance industrial site with an excellent tenant profile.”
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The opportunity could suit passive investors and land bankers looking to increase their exposure to Auckland’s high-demand industrial property sector, along with value-add investors/developers, Brewer says.
“Passive investors are likely to consider this a future-proofed holding in the current market, where yard-based industrial sites are in short supply. We are also expecting interest from more active investors and developers, considering the significant upside provided by this site’s location, size and profile.”
Hawkins, which has occupied the site for over 20 years, uses the site for storing construction equipment. The current seven-year lease term, which initially commenced in October 2020, provides for two further rights of renewal of three years each, resulting in an possible final expiry date of September 30, 2033.
The lease is subject to regular market market rent reviews, with reviews in 2024, 2027 and 2030 if all rights of renewal are exercised. In addition, CPI-linked rent reviews every year (except market review years), provide rental growth upside over the remaining term of the lease, says Steele.
“The strong demand & supply dynamic in the Auckland industrial market and the rent review structure of the lease means there is excellent rental growth opportunity in the future.”
The site, which is flat and rectangular shaped, is primed for potential future development following the expiry of Hawkins’ lease, Brewer says.
“There is obvious scope for future development here, given the shortage of industrial facilities in Auckland, the growth of the logistics & warehousing sector and the site’s location amid large warehouse occupiers and close to road, rail and air transport.”
Investors looking at a long term buy & hold will have noted the constrained supply of yard-based industrial space in popular areas like Wiri continuing to decrease as more warehousing is constructed, says Steele.
“The unprecedented demand for warehousing over recent years has meant that larger investors and developers of industrial property have responded with increasing levels of construction. The resulting reduction in undeveloped land over the past couple of years as these new developments have been completed is placing a squeeze on purely yard-based users,” he says.
“As a result, businesses which require yards for activities such as truck parking or storage of containers, vehicles and large scale items, are finding it increasingly difficult to find suitable sites to lease, which bodes well for owners of the remaining yard-based sites in the market.”
- Article supplied by CBRE
