Investment property to take off at Auckland's airport precinct

A substantial commercial property in Auckland’s airport precinct with an eclectic mix of tenancies has been placed on the market for sale. The 2841 square metres building sits on 4854 square metres of land in Richard Pearse Drive, and is tenanted by a gymnasium, a physiotherapy treatment facility to treat all the strains and muscle ailments caused by over-training, and the warehousing activity of furniture retailer Early Settler. Combined, the three tenancies generate an annual income of $351,750 plus GST per annum. The building - which has an Initial Evaluation Process assessment of more than 100 percent - is being marketed for sale by auction on September 23 by Bayleys Manukau salespeople Jamsheed Sidhwa and Luke Carran. The tenancy mix for the premises includes: Fitness 24/7 on a six year lease running through until 2023 with a further two year right-of-renewal returning $198,000 plus GST per annum Early Settler on a three year lease running through until 2018 with a further two and one year right-of-renewal returning $138,000 plus GST per annum R.T.P Physio Ltd on a four year lease running through to 2019 with two further two year rights-of-renewal returning $15,750 plus GST per annum The Early Settler warehousing component of the property takes up some 1524 square metres of ground floor, while the 24/7 gym amenity - encompassing the physiotherapy studio within its trading area - leases 1317 square metres of space over two levels. The Active Physio Clinic is located on the ground floor. Mr Sidhwa said the building structure was located in the middle of the property, and therefore had easy access to car parking for 27 vehicles on the surrounding concrete parking area. He said the well-maintained property was located in a Business 5 zone which acted as buffer between the heavier industrial activities of the Auckland Airport precinct’s Business 6 zone and the area’s residential neighbourhood just a few hundred metres away to the west. "The property’s proximity to the airport provides an immediate access point to the national and international markets should the future use of the property change," Mr Sidhwa said. Other businesses in the immediate vicinity include freight and logistics companies, IT and software support businesses, a number of branded and stand-alone hotels, childcare facilities, telecommunications firms, and goods management and storage warehouses. Mr Carran said the front portion of the building had been converted into an open plan format some eight years ago. The fitness and health tenancy component of the property encompasses commercial-grade toilets, showers and changing rooms, aerobics studio and machine weights on the upper mezzanine floor, which has an internal staircase linking the free-weights section of the gymnasium. The ground floor, which houses the Active Physio Clinic, also features two administration offices and a staff lunchroom accessed through a pair of swivel glass doors. Meanwhile, the Early Settler warehouse portion of the property occupies the rear half of the premises. The high stud warehouse with four bay roller door access under canopy coverage is a supplementary storage facility to Early Settler’s other warehouse which is separately leased at 40 Richard Pearse Drive. The security-fenced two properties utilise the same right of way access - which allows efficient traffic management for both incoming and outgoing stock. On account of its expansion and success, Early Settler has been operating its distribution model from the conveniently adjoining two buildings and the common secure yard for six years, The 40 Richard Pearse Drive property gives the company unparalleled exposure to more than 50,000 vehicle movements every day, while 38 Richard Pearse Drive has given the company the extra capacity that it would not have otherwise had. "The building has been carefully structured to now offer both an attractive public frontage onto Richard Pearse Drive for tenants whose clientele are the public, while the rear warehousing facility complements its adjoining neighbours," Mr Carran said. "The structural layout of the building means it can be maintained in its current format. Alternatively at some point in the future it could reconfigured back into one larger single tenant warehousing and supporting commercial office complex, or it could potentially be reconfigured even further into three separate commercial premises each with their own warehousing floor plate. "From an investment perspective, that’s a huge degree of flexibility for any new owner - underwritten of course by the long leases currently in place to a diverse tenancy mix."