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Fully leased Penrose building offers future options

Tags: Commercial

A fully leased building in the sought after industrial suburb of Penrose is up for sale offering just over $200,000 in annual rental income.

Located on a 1627 sq m Light Industry zoned site at 14 Greenpark Rd, the 1451 sq m premises comprises a mixture of warehouse, workshop and office space over two levels with a small third level currently used for a studio apartment.

Originally subdivided into seven units, it now accommodates four tenants with the anchor tenant being the MoMo Tea restaurant group which operates a chain of food and beverage outlets around Auckland offering a variety of Asian cuisine and teas.

It occupies over 80 per cent of the property’s floor area and has a six-year lease from March 2017, with two six-year rights of renewal which if exercised would take its lease through until 2035. Their lease is currently generating net annual rental income of $173,887 plus GST with two-yearly rent reviews to market.

Three other smaller tenancies on a variety of lease terms occupy the balance of the building which has an Initial Evaluation Procedure (IEP) seismic assessment of 71 percent of New Building Standard. The property’s total net annual rental income is $201,140 plus GST.

The property is being marketed by Millie Liang of Bayleys Auckland office and is among a wide selection of commercial and industrial properties featured in Bayleys’ latest Total Property magazine which will go for auction at 11:00am on Wednesday August 8 at Bayleys House, 30 Gaunt Street, Auckland unless sold prior to that date.

“This a rare opportunity to acquire an investment property in this popular central Auckland industrial location which currently has very little vacancy,” Liang says. “The fact that the property could at some stage be converted back to up to seven separate tenancies with their own entrances increases its attractiveness and flexibility as a long-term investment proposition.”

Mo Mo Tea’s head office is located in the eastern part of the second floor of the building. The majority of this space has been recently renovated and enjoys good natural light, Liang says. The front portion comprises a mix of an open plan area and partitioned office and meeting rooms with a combination of carpeted and laminated timber floor coverings and has a new kitchenette. The rear portion comprises a gym and storage area. The western section of the first floor is utilised for storage.

There is a mix of workshop, storage, office and showroom space on the ground floor. Its food grade premises include a commercial kitchen, several chillers and freezers and a cool store with multiple roller door access and a spacious loading area.

The property is located on a rear site on the south-eastern side of Greenpark Road, a short distance west of its juncture with Great South Rd. “Being close to the southern motorway interchange and the south eastern arterial provides great access both north, south and east to Howick and surrounds,” Liang says.

“Beyond the industrial area lie well established residential localities including Onehunga, One Tree Hill and Ellerslie with a big residential population base providing a stable supply of labour. Neighbouring Mt Wellington also boasts fantastic amenities including the Sylvia Park and Apex shopping centres.”

The latest Auckland industrial accommodation survey conducted by Bayleys Research shows that Penrose has the lowest level of empty premises amongst the region’s major industrial precincts, with its vacancy sitting at just 1.4%, half the overall vacancy rate of 2.8%.

“The latest figures are little changed from those recorded in 2017 and 2016 despite an increase in new construction activity, reflecting the high levels of business growth and expansion in Auckland,” says Ian Little, manager Bayleys Research. “This is generating continuing strong demand for industrial premises from both tenants and owner occupiers.

“With tight market conditions persisting we would expect industrial rents to face further upward pressure, strongly underpinning capital values.”

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