The land and buildings housing a self-storage facility in the lower North Island town of Marton have been placed on the market for sale, along with its business, JK Storage.
Trading consistently at a 95-100 percent occupancy, the property at 34 High Street is home to the business JK Storage, a 49 unit self-storage facility which is offered for sale as a freehold going concern by Bayleys salespeople Russell Duggan of Whanganui and Brendon Bradley of Tauranga.
“The units plus a street front office/showroom and caretaker’s flat provide a split-risk investment from three potential income streams,” says Mr Duggan.
The 1,705 square metre site on the corner of High and Bowen Streets was originally developed by agriculture business Hodder & Tolley to store grain seed and other agricultural products before redevelopment by JK Storage as a self-storage facility in 2017.
“JK Storage is a flexible, owner-operated business with day-to-day administration averaging about two to three hours a week,” Mr Duggan says.
“One of the major benefits of the storage business is that, unlike conventional commercial or industrial assets where rent can only be reassessed every two to three years, rental rates for storage units are continually reviewed according to supply and demand.
“Ranging in size from seven to forty cubic metres, the units have been built inside Hodder & Tolley’s existing structures and feature individual units which are secure and robust with good ventilation and easy access.
Built in several stages to meet demand for new units between September 2017 and September 2018, Mr Duggan says that each time a new block has been commissioned, the units have been fully occupied within weeks of completion.
“The business has an impressive annual net income with rental rates which are at realistic levels for private clients,” Mr Duggan says.
“JK Storage generates a continuous cashflow and strong returns from maximum local exposure and ongoing referrals, the bulk of which are from private households,” he adds.
The property comprises two main buildings – a recognisable two-storey structure at the front, locally known as ‘The Tui Building’ which houses an office/showroom, amenities, ground, upper and mezzanine storage units with bulk roller door entry access from Bowen Street, plus a business office and caretaker’s flat.
The other building is located at the rear of the property and comprises 23 storage units, while the balance of the site includes surplus land presently utilised as external storage for motor vehicles and containers which provide for potential development or future expansion.
The two buildings provide for a gross floor area of about 979 square metres.
The current owner has committed to a new three year lease term for the office/showroom area with further rights of renewal when a new owner settles the property to purchase.
“In taking the lease the existing owner has also undertaken to renovate the front office to a high standard, however, if a buyer wants the front office for their own use, the owner is willing to sell it with vacant possession.”
Mr Bradley says that self-storage businesses are in high demand, with JK Storage presenting an opportunity of land, buildings and business with three income streams and the potential to further develop the site.
“Recent comparable sales include Whakatane’s East Bay Secure Storage – a purpose-built 106 unit facility on a 2,113 square metre site which was sold as a freehold going concern for $1.5 million at a 7.93 percent yield,” says Mr Bradley.
Located in the lower North Island hub of Rangitikei, Marton is about 30 minutes from both Palmerston North and Whanganui, and about two hours from Wellington and Taupo. The district is currently experiencing a strong period of residential growth, with the Rangitikei District Council currently exploring options for building new head office facilities in the centre of the township.