The large-scale warehousing property at 176 Gracefield Road has a new six-year lease locked in place from 1st September this year, to long-established Wellington firm LT Transport Limited which will relocate from elsewhere in Gracefield to these larger premises.
That lease returns net income of $480,000 plus GST per annum, with the tenant paying 100 percent of outgoings.
With 8200 square metres of land, the sizeable warehouse property is neighboured by other well-entrenched industrial occupiers like Winstone Wallboards, Dulux New Zealand and various automotive and trade companies.
Prior to the new lease commencing, the current owner will undertake a number of building improvements including interior painting of the offices, installation of heat pumps in the offices, exterior painting and restrengthening to 67 percent of new building standard.
Ethan Hourigan and Richard Faisandier of Bayleys Wellington Commercial are marketing the property which will be sold by tender closing 4pm Wednesday 11th August.
The buildings comprise four high-stud warehouse bays with multiple roller door entries totalling 4129 square metres and adjoining 381.5 square metres of offices and amenities. There is a total of 310 square metres of secure yard areas to the north and south of the warehousing.
Hourigan said with a tide of cash searching for viable returns and with the industrial sector remaining the best-performing property asset class throughout New Zealand, this property is a classic bottom-drawer proposition with future upside.
“The new six-year lease from September this year has automatic growth provisions built into it along with two three-year rights of renewal with a final expiry in August 2023.
“The rental is benchmarked annually to the consumer price index, with three-yearly reviews to market levels.
“That gives certainty for investors and, when viewed along with the intrinsic value of the underlying parcel of land, it stacks up as a portfolio backbone.”
Originally constructed for Austin Distributors Federation Limited circa-1965, and more recently home to Formway Furniture and North Power, the property has location firmly on its side, according to Faisandier.
“The wider Gracefield area continues to outperform other industrial precincts in the Wellington region with next-to-no vacancy and a scramble from investors when anything hits the open market,” he said.
“With land opportunities around Gracefield and Seaview constrained by the topography, the more-than 8,000 square metre site underwrites the investment equation as the General Business zoning has favourable redevelopment credentials.
“Despite the functionality of the existing buildings on site, it’s fair to say that the bulk of the property’s value lies in the land.”
Faisandier said in property investment circles, “big sheds” remain in favour and when they are accompanied by solid leases, it’s “gloves off” with investors proactively pursuing that golden formula of location, tenant and returns.
Transportation and crane specialists LT Transport Limited, with its fleet of more than 30 vehicles, has been owned by Callan and Janine Tomkies since 2016.