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Bottom Drawer Investment With Tenant Scaling New Heights

Exterior and aerial images of the subject property at 92-102 Hutt Road, Kaiwharawhara, Wellington.

A strategically located, leased industrial offering, around three kilometres from Wellington’s CBD, has come to the market as the property owners opt for a sale and lease back arrangement.

The high-profile property at 92-102 Hutt Road, Kaiwharawhara was formerly home to a printing company and is in a prime location to take advantage of the main city arterials – both from an access perspective and for branding profile.

The property comprises an 1,800sqm drive-through warehouse building with yard and carparking with a new two-level 400sqm office block to be constructed by the vendor at the northern end of the warehouse building within 12 months.

The level site is 3,876sqm and there is provision for 28 off-street car parks within the yard area.

Well-established and reputable scaffolding firm Geeves Scaffolding occupies the entire property, with a new nine-year lease coming into play from 1 st May this year.

Geeves – along with five other scaffolding operations throughout the country – is owned by NZ Scaffolding Group, New Zealand's fastest-growing provider of scaffolding height access and related infrastructure services and second place-getter in the Deloitte Fast 50 Masters of Growth Index 2019.

Fraser Press and James Higgie of Bayleys Commercial Wellington are taking the property to tender closing Wednesday, 15 th April.

Press says the new office addition planned for completion within a year, will suit the current tenant’s busy operation and will also ensure that the entire property has broad appeal well into the future.

“There will be a staged settlement structure to reflect this newly-built component and the rental once completed, will add $75,000 to the net rental, bringing it to $395,000 per annum, plus GST,” he explains.

“When you’ve been in the commercial/industrial property game for as long as we have, it’s easy to spot a decent bottom-drawer opportunity and this one stands out in the current market.

“It has location, space fundamentals, tenant credentials and a long-term net lease with fixed annual rental increases and a bank rental guarantee on its side – all the dynamics that lenders look for when backing an investment.”

The clear span warehouse was originally built circa-1930s and has been totally refurbished and strengthened to achieve an earthquake rating of 100 percent NBS as at 2016.

Construction comprises painted concrete floor, a mix of concrete walls with galvanised steel cladding above, new exterior galvanised cladding on the western wall where a previous office block has been demolished and galvanised roofing on a lightweight steel truss roof framing.

A suspended tile ceiling has been installed throughout the warehouse at a stud height of around 5.5 metres, while the actual height to the underside of trusses is circa-7.4 metres.

The warehouse has motorised roller doors at either end together with curb crossings at both the northern and southern ends enabling drive-through which streamlines business activity for the tenant.

“The property's proximity to the CBD and its easy access to arterial roading gives the tenant a major advantage over their competitors in being able to efficiently service the demand for scaffolding in the wider Wellington region,” says Press.

“Geeves Scaffolding is a prominent player in an industry that has seen strong growth as a result of the ever-increasing demand on their products to meet the construction sector’s stringent health and safety requirements when working above ground level.”

Press says the long-term lease with renewals will give confidence to a new owner, as will the property’s inherent flexibility.

“The property is generic enough to adapt to a number of commercial or industrial uses under its Business1 zoning,” he says.

“The new office facility will further underpin its future desirability and, given the proximity to the city centre and the evolving business activities right along Hutt Road and into Thorndon Quay, showroom could well be the best and highest long-term use beyond its current guise.”

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