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Tenanted investment property for sale in Auckland's city fringe

JLL marketing freehold commercial building with six-year lease in place



Long term investment with development potential/new-zealand/en-gb/news/916/long-term-investment-with-development-potentialAUCKLANDLong term investment with development potential
Former Fire Station on high profile corner site/new-zealand/en-gb/news/915/former-fire-station-on-high-profile-corner-siteCHRISTCHURCHFormer Fire Station on high profile corner site

12-16 Auburn St 06.jpgJLL is marketing a tenanted investment opportunity in Auburn Street, Grafton. 

The two-storey commercial building offers 762sqm of floor space on a 749sqm site. It comprises office and warehouse space and has all the benefits of being located in Auckland’s city fringe. 

JLL agent Ben Jamieson is marketing the property at 12-16 Auburn Street, which runs between Khyber Pass and Boston Street. It is for sale through an expression of interest campaign, closing March 3, 2017. 

“The vendor, Tasman Machinery, currently occupies the building. They have decided to pursue a sale-and-leaseback scenario for business reinvestment, and will take a six-year lease over the entire building. 

“For the new owner, this means a solid, passive investment that will bring in $170,000 net rent per annum,” Jamieson says. “The lease terms are negotiable, however we are proposing a six-year term with two rights of renewal of three years, with annual rent reviews and fixed annual rental increases of 2% and thus guaranteed growth for the successful investor. 

“Tasman Machinery was first registered in 1966 and is a leader in plastics processing technology. It supplies high-tech manufacturing solutions to the Australian and New Zealand plastics sector. One of its key customers is Sistema. 

“Sistema (which recently sold to Fortune 500 company Newell Brands) exports to 82 countries and counts its customers in the millions. Sistema is just one of the companies that Tasman deals with, which gives you a sense of the scale of the plastics business.

“This area of Grafton is zoned for Business - Mixed Use under the Auckland Unitary Plan, which opens up a myriad of possibilities in terms of the site’s development potential in the longer term,” Jamieson says. 

The property is a mix of concrete block and glazing with aluminium joinery. It was built in the 1980s and has an 87% seismic rating. It has 11 covered and four uncovered carparks, and Tasman’s office space has had a modern fit-out. 

The property is within easy walking distance of Mt Eden Train Station, Grafton Train Station and Auckland Hospital, as well as the new Auckland University campus on Khyber Pass. It is just around the corner from the Les Mills gym on Khyber Pass as well as Auckland Grammar School and St Peter’s College. 

JLL says property in Auckland’s city fringe is proving popular with mid-range investors who understand how the city is changing. 

JLL’s Managing Director Nick Hargreaves says there are several forces at play that are making the fringe so popular. 

“Investors still have a huge appetite for property and when you combine that enthusiasm with the infrastructure improvements that are coming to Auckland, it’s easy to see why city fringe properties are selling so quickly.

“The Unitary Plan allows for Mixed Use zones around centres and along high frequency public transport routes, making it easier for a variety of residential and commercial developments to happen in the city fringe.” 

Auckland Council’s investment in transport will pay dividends for city fringe property owners. 

When the City Rail Link opens in 2021, Britomart will become a through-station and Auckland’s entire rail network will benefit from rapid rail access. 

“The City Rail Link will open up areas like Newmarket, Grafton, Mt Eden and Kingsland, bringing a new level of vibrancy to these locations,” Hargreaves says. 

Auckland Council expects city centre and city fringe residents to double to 140,000 by 2041 and forecasts that city centre and city fringe employee numbers will double to more than 200,000. 

Once the CRL is open, Auckland Transport says travel time between Kingsland and the new Karangahape Station will be six minutes, or 11 minutes between Newmarket and the new Aotea Station. 

“Tenants who can’t afford CBD locations can take premises in the fringe and still be close to town. Imagine being able to use the train to get to a meeting in the city in minutes,” Hargreaves says.

Jamieson says all of this development in the city fringe means the future is bright for the new owner of 12-16 Auburn Street. 

“Whether the new owner decides to keep this property as a source of passive income look at development options in the future, Grafton is an excellent place to invest.”