Sale of adjoining industrial properties represents a 15,661sq m development opportunity
Two adjoining industrial properties have been put on the market for sale, offering potential buyers the chance to transform a combined 15,661sq m of land in a high-traffic spot at the northern entrance to New Plymouth.
Together, the properties could house a modern industrial park, made up of small-to-medium-sized trade and warehousing businesses, and subject to planning consent, they could even be redeveloped into a retail or hospitality hub.
The properties, at 686 and 690-694 Devon Road, are being marketed for sale by Bayleys Taranaki sales agent Alan Johnston, and feature in the latest issue of Bayleys’ Total Property portfolio magazine.
“These properties are in a prime location – just an 11-minute drive from New Plymouth CBD and a nine-minute drive from New Plymouth Airport – and are well placed to benefit from recent growth in the Taranaki district’s population and economy,” Mr Johnston says.
686 Devon Road has an asking price of $2,600,000 plus GST while tenders close for 690-694 Devon Road on Wednesday, October 26, unless the property is sold prior.
686 Devon Road offers 1,921sq m of lettable floor area on 6,395sq m of land, and has been home to truck repair firm McCurdy Engineering Ltd for the past 20 years. The building comprises: two high-stud workshops covering 1,280sq m; a 137sq m mezzanine featuring a staffroom, office and storage rooms; 420sq m of ground floor offices and amenities; and an 84sq m canopy.
McCurdy Engineering is moving to a new site, but has a 12-month leaseback on the property, with two six-month rights of renewal. “With the net rental on the property $216,000 a year plus GST, the leaseback arrangement provides buyers a generous holding income while they develop their own plans for the site,” Mr Johnston says.
690-694 Devon Road is being sold vacant and has lettable floor area of 2,026sq m on 9,266sq m of land. The buildings comprise a modern high stud warehouse alongside an older medium stud warehouse with offices and amenities. The site also features an extensive car park (22 marked) and yard to the west, which provides access to the site.
Mr Johnston says: “Both properties are likely to be of interest to developers looking to construct modern showroom, trade or industrial premises. Individually, they could easily accommodate a large warehouse and trade office.
But a change in planning consent could open the sites up to retail and/or hospitality opportunities.
Mr Johnston says: “Devon Road was once a popular area for heavy industrial properties, but more recently it has become a destination for service industries and shopping complexes.
“The properties are already located directly opposite the popular Valley Mega Centre complex, a bulk retail development home to big national and international brands, including Harvey Norman, Countdown, Mitre 10 Mega, Warehouse Stationery and Noel Leeming.
“The surrounding area has also seen massive growth in residential developments, which could support new businesses.
“Subject to planning consent, either property could be transformed into a convenience retail hub, offering small-to-medium sized hospitality and retail businesses, such as sushi bars, cafes and pharmacies, with fuel station. Their easy access and exposure to some 17,000 vehicles a day – including traffic to and from the airport – could also make them an ideal location fast food drive thrus.”
Mr Johnston adds: “With the nearest McDonald’s and KFC restaurants within the CBD, and the area’s population set for growth on the back of new residential developments, the sites are ideally suited to take advantage of Kiwis’ appetite for fast food.
“New Plymouth lacks full service fast food sites. These typically feature a free-standing restaurant, a children’s play area and drive-thru facility, with parking, on sites ranging from 1,500m2 to more than 3,500m2.
“There is a strong investor demand for food retail sites. Most assets are on long-term leases with wealthy, financially secure restaurant operators, and the fast food sector has proven resilient in economic downturns.”
However, Mr Johnston believes that properties would represent a more compelling prospect when combined.
“The combined site could easily house a business or retail park, made up of small to medium-sized units,” he says.
Mr Johnston says demand for new commercial and industrial space has elicited a strong response from the development sector over recent months.
The value of consents in the area totalled just short of $57 million in the year to May 2017, with the industrial sector was responsible for the lion’s share of consents, reflecting the demand being generated by businesses supporting the current surge in residential development.
Fertiliser company Ravensdown recently sold its 7.44-hectare property, at 662-672 Devon Road. The identity of the buyer is not yet known but it is expected the site will undergo a massive redevelopment.
Mr Johnston is also marketing a third industrial property at the northern entrance of New Plymouth. 29-37 Paraite Road, which is within 3.3km of the Devon Road properties, is to be auctioned on Wednesday, October 18.
The dual access 10,840sq m property, which houses a 1,983sq m warehouse with refurbished offices, generates $202,497 a year in net rent, plus GST. The tenant, a well-regarded international company, has a seven-year lease, commenced in 2012, with three one-year rights of renewal.
The building comprises 230sq m modern offices and amenities, four high stud warehouse/workshop areas covering 1,362sq m; a 170sq m mezzanine; and two canopies totalling 621sq m.
Mr Johnston says: “The property is located on the western end of the Bell Block industrial estate with a wide frontage to Paraite Road and a right of way entrance/ exit to Connett Road. With a strong, long-term tenant in place, it will appeal to buyers looking for a hands-off investment in an in-demand asset class.”
He adds: “The increase in residential and commercial property development activity has seen a significant lift in demand for industrial property, and land for industrial development. This has resulted in increases in rental values for industrial properties and land values.”