A dual tenanted property in the tightly held industrial precinct of Hornby provides investors with an attractive split-risk passive income opportunity.

Bayleys salesperson Nick O’Styke says increased pressure on the building and construction sectors and colossal e-commerce demand has created an insatiable appetite for industrial property, with extremely low vacancy rates noted across Canterbury’s industrial sector.

“At the same time, a credit crunch has shifted investor focus to passive investments that allow a foothold in tightly held areas while generating stable returns.

“Disruption throughout the pandemic has meant businesses are seeking more space for storage, with proximity to logistics hubs a measurable bonus.

“On the other side of the ledger, capital continues to flow through the market, so we are seeing demand for industrial property from all corners – investors, business owner-occupiers, tenants and developers.

“These groups have identified Hornby as one of Christchurch’s premium industrial precincts, with upside for businesses and occupiers from the location between the Southern Motorway and State Highway 1 linked by Halswell Junction Road.

“A tenanted industrial premises at 4 Klondyke Road, comprising 750sqm (more or less) across two levels, is positioned to benefit from demand for such assets,” O’Styke says.

The premises, built circa 2000, has been split into two tenancies, each with a lettable floor area of 375sqm (more or less).

O’Styke is marketing the property for sale by auction (unless sold prior) on Thursday, 13th October 2022, with colleague Anna Morawiec.

The property generates annual net rent of $95,000 plus GST and outgoings from two operations.

Kiwi business RoofTG Pacific, which specialises in the production of steel-based roofing products, is in the process of renewing a three year lease, expiring February 2026, with one further renewal right.

Anna Morawiec says RoofTG occupies unit one, which has 270sqm of warehousing and 105sqm (more or less) of office accommodation, plus six car parks.

The University of Canterbury Student Association occupies the second unit with a three year lease to January 2025 and three further two year rights of renewal.

The units are mirror images of each other, with 12 car parks in total and a seismic assessment of 92 percent of NBS.

Morawiec says the substantial 1,200sqm (more or less) site in Heavy Industrial zone provides an attractive proposition for its current tenants, with a conventional layout and ample car parking easily accessible from Klondyke Road, which is a feeder road to main arterial Shands Road.

“Vacancy rates across Hornby are near record lows, and tenants are eager to remain in the area, which is an established logistical hub.

“We are seeing investors pay close attention to industrial rental rates, which continue to outperform other asset classes, and the two tenants offering a spread of income on this property will be particularly attractive, with scope for future rental growth further underpinning the property’s value proposition,” Morawiec says.

Click here for more information on the listing.