8,200sqm landholding in Wellington’s preferred large industrial location

The Property
• 8,200sqm landholding in Wellington’s preferred large industrial location • Four high-stud warehouse bays with multiple roller door entries totalling 4,129sqm; adjoining 381.5sqm offices and amenities, and 3,100sqm of secure yard areas
• New six-year lease to a well-known transport company
• Returns net income of $480,000 plus GST per annum
• Tenant pays 100 percent of outgoings
• General Business zoning

Quick Look
• National Total Property marketing campaign – by tender
• Interest generated via Bayleys’ databases and Total Property magazine
• High enquiry levels from around the country
• Tender process generated multiple tenders and a successful unconditional sale
• SOLD for $7,500,000
• Purchased by an active local investor to add to an existing commercial property portfolio

The Story

A new lease, strong tenant covenant and undeniably favourable location underscored this Gracefield investment opportunity.

Agents Ethan Hourigan and Richard Faisandier of Bayleys Wellington Commercial said the property offering was a textbook example of a hands-off, passive investment opportunity in the competitive industrial property sector.

“The large-scale warehousing property has a new six-year lease locked in place to long-established Wellington firm LT Transport Limited, which will relocate from elsewhere in Gracefield to these larger premises,” said Hourigan.

“Prior to the new lease commencing, the vendor undertook 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.”

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, hence it was no surprise to see the high level of buyer interest in the property.

“Looking ahead, the property’s General Business zoning has favourable redevelopment credentials, and, 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.

“Overall, this is a classic bottom-drawer proposition with the intrinsic value of the underlying parcel of land, meaning it stacks up as a portfolio backbone.”

Vendor Comment

A change in circumstances for the vendor meant that he no longer required the property for personal use, so the decision was made to sell while the market was buoyant.

When the vendor purchased the then-vacant property 12 months prior, he had a clear requirement and use for the building for personal business purposes.

When those business plans changed and he no longer needed the warehousing, a tenant was sought and found.

The leasing deal agreed to required certain improvement works and strengthening to be carried out prior to occupation, and once this work was in motion, the owner then decided to capitalise on the current market for industrial property and sell.

Recognising that the Gracefield site would resonate with many investors looking for opportunities in an extremely constrained and competitive market, the tender process was initiated with the vendor having a clear idea of an acceptable price in today’s climate.

The successful unconditional tender met the vendor’s price expectations and he was impressed with the efforts of the Bayleys Wellington team in bringing multiple parties to the tender table.

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