A truly unique investment opportunity has arisen in the Wiri industrial precinct, the sale of a site housing one of only two tyre recycling plants in Auckland.
The freehold 9,000 sqm site - complete with a new facility which opened only last year - is located at 75 McLaughlins Road. It is being marketed by Paul Steele and Vinay Patel of CBRE, due to be sold by deadline private treaty closing 4pm 12 June 2019 unless sold prior.
Tenanted by major blue-chip corporation Waste Management, Steele says the property ticks many financial and social boxes offering a stable and secure long-term investment.It also offers a chance to indirectly support a Government backed initiative to tackle a major waste issue.
“This is certainly a stand-out for Wiri: a large open space with $400,000 of improvements, funded by a well-capitalised tenant that is motivated to stay and provide a reliable income stream and long-term benefits. In addition, the new owner can take pride in being part of a solution to the approximately five million tyres that can no longer be used on vehicles in New Zealand each year.”
As to be expected by an operation which requires multiple freight movements daily, 75 McLaughlins Road is strategically located.Only 1.5km from State Highway 20, 5km from State Highway 1 and less than 9km from the airport, there aren’t any better places with such easy access.
100 metres away from the site is Stonehill Business Park, built by an industrial developer, Euroclass. A neighbourhood of modern, tilt slab buildings tenanted by reputable brands such as Plumbing World, Tyremax, Superfrieght and Cargo Plus.
Zoned Heavy Industry, 75 McLaughlins Road site consists of a large open space with a 5,600 sqm reinforced concrete slab in the centre that is 150 mm thick. With a handle of 30 MPa loading, it’s suitable for combi-lifters and specialised loading equipment. Waste Management has also invested in an electricity transformer capable of generating up to 750 KVA.
The equipment and machinery allow for up to 30,000 tonnes unusable tyres to be processed annually, with tyres shredded and rubber broken down, before the resulting product is transported to Golden Bay Cement in Northland. The site has excellent access and manoeuvrability along with a connecting weighbridge for trucks.
Steele says the improvements have all been funded by the existing tenant and while some are purpose-built for the current operation, future site owners will still benefit.
“The concrete slab especially will have an enduring usability by future tenants, particularly given that the slab is required to be vested back to the landlord upon lease expiry in a state of good repair, enabling higher rental return for the long term at no additional cost to the owner.”
Patel says interested parties shouldn’t overlook the fact that the site is tenanted by Waste Management, New Zealand’s largest waste collection provider, with a reported profit of $28 million in 2017, and owned by Beijing Capital since 2014.
Currently returning $174,720 + GST p.a. the site is occupied by Waste Management on a five-year lease with 4% annual growth rate factored in, and future renewal rights for another five-year renewal.
“The tenant is a on a well-structured lease based on standard Auckland District Law society documentation which includes market rental review in 2022,” says Patel. Adding its proximity to the Wiri Inland Port, only 2.2kms away, 75 McLaughlins Road is a compelling proposition.
“As a major commercial rail connection to the main Auckland port and the national train network, Wiri is strategically positioned to be an absolute drawcard for warehousing and freight tenants. With just 1.1% industrial vacancy, Wiri is below the Auckland average and the positive vacancy trend demonstrating high demand in 2018.
“This has led to significant development activity to cater for the growing demand, as seen by the announcement last month by Asia Pacific industrial and logistics developer LOGOS, building a $100m purpose-built meat packing facility on Roscommon Road.”
Steele says there’s no doubting the growing popularity of Wiri as an industrial and freight hub given the forecast demand. “The ability to find quality yard spaces will be greatly reduced as sites are converted into finished developments. In this context, the rarity of concrete yard space with heavy industrial zoning makes 75 McLaughlins Road a very rare offering indeed.”
“Combining the uniqueness of New Zealand’s largest tyre recycling facility on site and a stable tenant, along with room for future site development, 75 McLaughlins Road is set to be a highly attractive trophy asset – one where the rubber really does meet the road.”
For New Zealand/international news or global stories, follow us on Twitter.
ABOUT CBRE GROUP, INC.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.