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Self-storage business in Kawerau to go under hammer

Self-storage business in Kawerau to go under hammer

The only self-storage complex in Kawerau has been placed on the market for sale.

It will be auctioned as a freehold going-concern by Bayleys on 6 March, unless sold prior by private treaty.

The purpose-built 102 unit facility in Paora Street would suit an owner-occupier or an investor according to Brendon Bradley of Bayleys Tauranga.

“Kawerau Secure Storage has been owned and operated by the current owners since 2005 and is a member of the Self Storage Association of Australasia.

“The current owners have an established trading history and, based on demand and enquiry, believe there is still scope for further growth and expansion with a captive local market to capitalise on,” says Bradley.

The business offers unit storage, external storage and an office tenancy which spreads risk.
“As a freehold going concern, it offers an excellent opportunity to purchase a low risk business generating continuous cash flow and having shown steady ongoing growth since the commencement of the business,” says Bradley

“The current year when annualised indicates a 60.67% occupancy as of February 2013 so there is rental and revenue potential in the future from the current storage facilities. This unit storage income is supplemented by external storage and the office rental.”

Computech Alarms Limited have a lease on office premises, five storage units and 100sq m of yard area for three years from 1 April 2013 with two, three-year rights of renewal and a final expiry of 2022.

At present, storage units utilise around half the total 4697sq m site area with the balance being used for external parking and container storage.

“This offers potential for further development of storage units on the site and the area has already been compacted and filled for this purpose. Future demand for self storage could easily be accommodated on this property,” says Bradley

Although residential users currently dominate the storage facility, commercial tenants are increasingly seeing the benefits of using it as a form of warehousing for products.

Bradley says the business requires minimal management, can be run on a part-time basis, and would suit someone who is semi-retired.

“This opportunity may suit a couple whereby one can run the facility and the other have outside employment, or alternatively it may appeal to an investor looking to run the business with a contract manager.”

The facility is currently managed by owner/operator Carol Reid and her role is predominantly administrative, whilst co-owner Colin Reid looks after general maintenance of the complex. Renting of a unit involves the completion of a Standard Self Storage or Vehicle Storage Agreement, receiving a deposit and establishing method of payment for future rental.

This storage complex comprises 102 units which are spread over two storage buildings. The facility has 16 different unit sizes ranging from lockers to double garage sizes allowing flexibility for customer requirements by offering a number of options.

The larger of the two buildings includes the storage business reception/office with two front carparks together with the adjacent office tenancy with all facilities and three front carparks. The other building is predominantly storage units.

The property is alarmed and monitored 24 hours per day, 365 days per year with unrestricted tenant access day or night. The land is fenced with 2.3 metre high security fencing on all boundaries together with security gates and lighting.

There are 16 cameras positioned to cover both the interior and exterior of the property while sensor security lighting operates around the complex. The premises are also currently monitored by the on-site office tenant, Computech Alarms Limited.

Access is via automated electronic entry and exit gates that operate on a swipe tag/card system.

Customers store and control their own goods as well as being liable for their own customer contents insurance. This means there is no ‘Bailee’ relationship between storer and storage facility business, so therefore no liability in respect of the storer’s items. As long as the customer maintains their monthly payments in advance they have unrestricted access to their storage unit, however, if in arrears this access can be denied until paid and in extreme cases the contents may be sold to recover unpaid revenue. This has proved to be a very effective debt recovery measure for financial management purposes. Payment is generally by automatic payment or internet banking.

“One of the major benefits of the lockup business is that, unlike conventional commercial or industrial investments where rentals can only be reassessed every two to three years, rental rates are continually able to be reviewed according to supply and demand,” explains Bradley.
The business is five minutes from Kawerau’s CBD and located off Tamarangi Drive, which forms part of a main road connecting Kawerau with Rotorua, Tauranga, Whakatane and the eastern Bay of Plenty.

Editor’s notes:

• New industry is being attracted to Kawerau, with a new educational and training institute established by Transfield teaching technicians how to work with fibre optic cabling etc. All training courses are linked to recognized qualifications from Auckland University Technology (AUT) or NZQA.
• A new geothermal power station has been built by Mighty River Power within the Kawerau Boundary aimed to produce over 50% of the electricity used in the region. There is also another power station currently under construction and applications are being processed for a third.

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