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Papakura industrial investment with superb local tenant covenant - Colliers

Contributor:
Fuseworks Media
Fuseworks Media

A near-new industrial property in the key South Auckland growth hub of Papakura is for sale with a long-term leaseback to established New Zealand steel manufacturing business Reoco.

Located in the heart of Papakura’s thriving industrial precinct, the property 83A Boundary Road is one of five standalone buildings in a modern industrial development that are occupied by local and international businesses.

It comprises a functional warehouse and office building on a 4,012sq m freehold site with three points of entry, full drive-around access and a fully fenced yard area.

Reoco Limited has exclusively appointed Colliers International to market the property for sale with an initial leaseback of eight years from settlement, plus rights of renewal.

The company will pay $271,767 plus GST in net annual rent, with fixed annual rental increases of 2.5 per cent.

The lease is guaranteed with a 12-month bank bond, which provides added security at a time when tenant covenant is a paramount consideration for investors.

Josh Franklin, Industrial Director at Colliers, says investments of this calibre are highly sought after in the current market.

"It’s a near new building that provides low maintenance in a location that continues to flourish. If you’re an investor it’s clear to see the way Auckland is trending south with developments such as Drury nearby and investment in infrastructure. This gives potential for growth as well as a safe return.

"Founded in 1999, tenant Reoco has grown to become one of the largest privately-owned steel manufacturing operations in New Zealand.

"The company has added significant value to its supply chain over the last two decades, having switched from imported products to New Zealand-made Pacific Steel in 2013.

"Reoco is now recognised as an industry leader in reinforcing steel. It employs more than 40 staff and contractors to provide expert steel fabrication and steel fixing solutions for commercial clients throughout New Zealand.

"With such strong tenant covenant, the property for sale is expected to attract savvy investors looking to secure a foothold in a key Auckland growth hub."

The property at 83A Boundary Road, Papakura, is for sale by deadline for offers closing today at 4pm (Wednesday 17 June).

Hamish West, Industrial Director at Colliers, says the property offers a desirable 80:20 warehouse to office ratio.

"This versatile investment property provides 1,510sq m of warehousing and 271sq m of single-level, modern office space.

"The high stud warehouse is clear-span and rectangular in shape, with four roller doors for access.

"The building has been designed to allow maximum efficiency, with the main roller door positioned to enable trucks to reverse straight in from the driveway to load and unload product.

"Colliers has sold several buildings in this development and the quality construction has underpinned the demand, along with the location and functionality.

"Design features include high stud concrete tilt-slab material, a high structural and floor loading capacity and ample power supply."

Jack Tuson of Colliers says Papakura is well positioned to capitalise on South Auckland’s growth, as nearby Drury and the surrounding areas are set to undergo a huge transformation over the coming years.

"The property is close to main arterial routes, with State Highway 1 some 3km away, providing access to the CBD and the major industrial precincts to the north.

"The site is also well serviced by nearby amenities, with the Papakura township just 2.5km away.

"Papakura is an easily accessible location within the ‘Golden Triangle’ of New Zealand’s major growth cities of Auckland, Hamilton and Tauranga. The regions combined make up 50 per cent of New Zealand’s population and return 50 per cent of the country’s GDP."

Franklin says Papakura’s industrial areas are booming and this has been accelerated by the shortage of industrial land and buildings across South Auckland.

"Business owners are seeing the huge benefit of positioning their businesses in the South, especially when they also service customers in the Waikato and Bay of Plenty regions.

"Papakura’s established industrial areas provide 135ha of predominantly Heavy Industrial zoned land and buildings. Major occupiers include Griffins Foods, Independent Liquor and Fletcher Concrete."

West says the development of Drury South Crossing - a 361ha master-planned, mixed-use precinct next to SH1 - will further increase the popularity and huge potential of Auckland’s South.

"Large new residential developments at Paerata Rise and Auranga will ensure a large staff catchment is right on the door step. The wider area will have a forecast population of a further 30,000 residents in the next 30 years."

Drury South will comprise 145ha of industrial and commercial land, 85ha of parkland and 45ha dedicated to a new residential community.

Another 51ha of residential and commercial development will be added to Drury Township.

To the west, Auranga will be home to 2,650 homes and a new vibrant town centre, while Paerata Rise will have 4,500 new homes.

The proposed new Mill Road transport link and the Drury Train Station will amplify connectivity to the area.

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