Two of the first big post-lockdown industrial transactions in Auckland – properties located just 1km apart in East Tamaki – have been concluded by Savills.
1 Ross Reid Place has been sold by Synergy Properties to Stride Property for $15,522,500 in a deal brokered by Paddy Callesen. Around the corner, 80 Springs Road has sold to an investor for $16,500,000, brokered by Jesh Jaskiewicz on behalf of Argosy Property.
Both deals, which commenced pre-COVID-19, were negotiated off-market through lockdown, presenting significant challenges for all parties involved, says Callesen.
“Covid has altered several of the assumptions that are factored into value modelling, for example rental growth and residual value dynamics. This meant the negotiations were much more complicated than usual, with the Ross Reid Place deal also experiencing additional delays with OIO approval,” he says.
“We’re very pleased to have now concluded these transactions following quite a difficult and testing period for doing business, resulting in happy vendors and purchasers.”
1 Ross Reid Place, which will be included in Stride Property’s Industre joint venture fund, comprises a 5,143sq m warehouse and office building on a 16,249sq m site on the corner of Allens Road and Ross Reid Place. The building was constructed in 1987 for Fisher & Paykel Appliances, which still occupies the property under parent company Haier (trading as Facteon Ltd).
Facteon holds an eight-year lease with two renewal options of six years each, and is currently in its first lease renewal period. Net passing income amounts to $754,239 a year. The property also includes 2,977sq m of surplus land, which is not included in the leased premises. This means the sale represented a 4.85% yield on income, plus $600/sq m on the surplus land.
80 Springs Road, which fronts Harris Road, one of the busiest arterials in the area, includes a 9,825sq m warehouse and office building on 15,129sq m of land. The building features a large warehouse, drive-through canopy and large container yard. It will be leased to national online retailer TSB Living, which also has warehouses in Wellington and Christchurch.
Prior to the sale Argosy made a significant investment into a full refurbishment of the 1970s building, including removal of asbestos, a brand new roof, resealed yards and corporate-grade offices. This has resulted in the property being presented in modern, high-grade condition.
The two large sales illustrate the continuing high demand for industrial property in East Tamaki among tenants, owner occupiers and investors, says Jaskiewicz.
“East Tamaki industrial property continues to be a supply-starved market, with the area’s central location and good transport links making it highly sought-after among occupiers. Its reputation as a premium location for industrial and warehousing activities means there are few opportunities for businesses looking to move here, with some waiting years to find a suitable property.” – Savills Vietnam