Warehouse-Office Building Offers Value in Southern Corridor
The land and building housing an import and distribution company in Auckland’s Southern Corridor have been put on the market for sale.
The light industrial property, at 25 Walls Road, in Penrose, has a long-term lease in place and should be of interest to buyers looking for a hands-off investment in an in-demand asset class.
It is among 65 properties featured in the latest issue of Bayleys’ Total Property portfolio magazine and is being marketed for sale at auction by Bayleys Auckland sales agent Mike Adams on Wednesday, October 25.
“25 Walls Road is located in the heart of the Southern Corridor - a popular light industrial and business precinct comprising Ellerslie, Greenlane, Mt Wellington and Penrose,” Mr Adams says.
The fee simple property, which is zoned Business - Light Industry, features a 702sq m, modern adaptable building sitting on 1,037sq m of land, with 24 metres of street frontage, and generates $106,302 in net rent plus GST.
The building itself is well maintained and comprises 39sq m office, a 464sq m high stud warehouse, a 55sq m canopy area, for parking, and a 145sq m mezzanine area.
It was built in 2007, using tilt slab panels and features long run roofing, and is occupied by Jac Jay Ltd, a company that imports and distributes specialist coating products aimed at enhancing architectural projects and which are widely used in the construction industry.
Jac Jay Ltd has operated out of the building since its completion and has just signed a new six-year lease on the property, running through to October 2023, with three three-year rights of renewal.
Walls Road is a popular destination for light industrial, warehousing and manufacturing businesses, and is home to tenants such as Fletcher Homes, Animal Control Services and PK Auto Electrical.
It close to local arterial routes – Station Road and Great South Road are on one side and Rockfield Road, leading into Mt Smart Road, is on the other – and the nearby the Ellerslie-Panmure roundabout provides access to State Highway 1.
Mr Adams says the property also benefits from its proximity to Penrose train station and the retail and hospitality amenities in the wider Southern Corridor and Sylvia Park shopping centre.
“Penrose has become a desirable location for many businesses looking for accommodation outside of the CBD. It is roughly half way between the Auckland CBD and Auckland International Airport, and transport routes are also easily accessed via main arterials and motorways,” Mr Adams says.
“Demand for industrial and warehouse property in the suburb, from both tenants and investors, is strong. The newness of the building and the modern fit-out of the office and warehouse make it an ideal passive investment property for family trusts and private investors.”
According to the latest Bayleys survey of the industrial real estate sector in Auckland, vacancy levels in Penrose have dropped from two percent in 2016 to below one percent this year.
Rental levels in the area are steadily rising while yields are firming, ranging between five-and-a-half percent and seven percent, Bayleys research shows.
Despite more than one million square metres of new industrial premises being consented across Auckland over the past four years, industrial vacancy remains at historic lows of close to three percent.
This high level of occupier demand makes industrial property a highly sought after investment asset as evidenced by the fact that it accounted for 56 percent of commercial property sale transactions in 2016 in Auckland.