Four commercial units in one of South Auckland’s largest automotive business hubs are being marketed for individual sale as part of Bayleys’ latest Total Property portfolio.
Between them, the four freehold unit title properties at 132 Cavendish Drive house three of the country’s leading automotive brands.
Combined, they offer more than 1638sq m of lettable space with wide street frontage, 39 car parks and a net rental income of more than $300,000 a year, with potential for growth.
All four are being marketed for sale by Bayleys agents Stuart Bode, Mike Bradshaw and Tony Chaudhary. Each individual unit is to be auctioned separately on Wednesday, March 7.
Mr Bode says: “132 Cavendish Drive is a well-regarded destination for motor vehicle inspection, service and repairs. The auto-businesses located there are not only complimentary, but also have the potential to drive custom to one another, strengthening the hub’s value proposition.
“Three of units are being sold with long leases attached and would ideally suit investors looking for a steady revenue stream in a high-growth area.
“The fourth unit is being leased on a month-by-month basis, so will be of interest to both owner-occupiers and investors.”
Mr Bode adds: “The opportunity is there to buy one, two, three or all four units.” The properties for sale are:
• Unit A - 612sq m occupied by vehicle inspection firm VTNZ. It is leased until 2024, with two three-year rights of renewal, generates an annual net rental income $125,107 plus GST and has 14 car parks.
• Unit B - 353sq m occupied by tyre-seller Cooper Tyres. It is leased until 2020, with one three-year right of renewal, generates an annual net rental income of $58,727 plus GST and has seven car parks.
• Unit C - 391sq m occupied by VTNZ. It is leased until 2024, with two three-year rights of renewal, generates an annual net rental income of $61,400 plus GST and has 11 car parks.
• Unit H - 282sq m occupied by auto-parts supplier Partmaster on a month-to-month lease. It generates an annual net rental income of $46,500pa plus GST and seven car parks.
All four units feature concrete slab walls and flooring and steel roofing. They are zoned Business - Light Industry under the Auckland Unitary Plan and have been occupied by the current tenants since the hub was constructed in 2001.
VTNZ is New Zealand’s largest vehicle inspection company and has 85 branches across the country. Although it began as a state-owned enterprise, it is now owned by German multi-national Dekra.
Cooper Tyres has 22 branches across the country while Partmaster, which supplies automotive parts for European and Japanese vehicles, has 17 branches nationwide.
There are three other car-related businesses that lease units at the hub - automotive service company Midas, used car chain Too Cheap Cars and auto electricians Papatoetoe Auto Electrical. The fourth unit is owned and occupied by is bathroom renovation company Bath & Tile.
Mr Bode says: “Units A, B and C offer buyers established brand names combined with a prime location. Individually, they could suit a first-time investor looking to enter commercial property market or an established investor looking to add an in-demand asset class to their portfolio.
“The expiration of Partmaster’s long-term lease for Unit H presents an opportunity for owner-occupiers to move their business into a high-profile location. The property lends itself to multiple activities, such as a continuation of its current use, or as a warehouse/showroom.
“In addition, there is a genuine opportunity for rental growth, as the rent was last reviewed in 2013.”
Vacancy for commercial units on Cavendish Drive is near zero, with demand for space high due to the road’s high traffic flow, proximity to major arterial routes, strong a public transport links and high levels of local amenity. The properties are within walking distance of Westfield Manukau and Manukau Supa Centa, both which have plenty of food and beverage options.
Mr Bradshaw says: “Cavendish Drive is a well-developed commercial area on the fringe of Manukau CBD and is a much sought-after address for small and large businesses. “It has links to the southwestern motorway and Auckland Airport at one end and the southern motorway at the other.
“The property’s proximity to the mall and retail park is an added convenience for those dropping their vehicles off for repair or inspection at 132 Cavendish Drive. The rail and bus stations also allow city workers to commute while their vehicle is being attended to.”
Commercial businesses in the area encompass a broad range of activities, including not only automotive-based businesses but retail, showroom/warehousing, childcare and education centres.
“But it’s the location’s reputation as a hub for auto-related businesses that should drive interest,” Mr Bradshaw says. “The automotive industry in New Zealand supplies and services one of the world's highest car ownership ratios.
“NZTA figures show there were 1.14 million used car transactions in New Zealand in 2017 - a record year for the market - and industry analysts predict that growth to continue.
“With the average age of a used vehicle in New Zealand rising to 14 years and used cars now clocking higher mileages than they did five years ago, businesses that deal in auto inspection, servicing and parts are an attractive proposition for commercial property owners.”
Mr Bradshaw says 132 Cavendish Drive’s value proposition is the symbiotic relationship between VTNZ and the repair and parts businesses that surround it.
“VTNZ’s presence has the power to drive custom to the neighbouring businesses,” Mr Bradshaw says.
“Similarly, the presence of auto repair shops next to VTNZ increases the chance motorists will choose it to inspect their vehicle, as any issues can be handily taken care of by the neighbouring businesses.”
According to New Zealand Transport Authority figures, almost 40 percent of warrant of fitness checks carried out in the year to June 2017 ended in failure - with inspectors finding faults in vehicles 1.7 million times.