Greenfields sale sparked by zone change

Manukau City Council supported the rezoning of the Mangere site as industrial land, as there was a shortage of business land in Manukau. Photo / Supplied

Trans Tasman Properties (TTP) has put a large and rare piece of South Auckland greenfields industrial land on the market as the Hong Kong-owned group continues to reduce its New Zealand property holdings to concentrate on its Asian investments.

The privatised company has owned the majority of the vacant 11.7ha Mangere site at 2-4 Favona Rd and 99-133 Walmsley Rd, Mangere, for 3 years.

The land is being sold following a plan change approved by the Manukau City Council and Environment Court that rezones it as a Business 5 Favona Special Policy Area. The change will become operative on March 12.

"There is nothing comparable on the market," says Paddy Callesen, South Auckland managing director for CB Richard Ellis, who is marketing the property by private treaty closing March 12, with colleague and senior director Derek Harries.

"This is the biggest parcel of undeveloped Business 5 zoned industrial land in the central Auckland area and an attractive greenfields opportunity for developers and investors."

Callesen says it was always TTP's intention to get the site to a stage where it had the right zoning and a new owner could carry on with development resource consents.

Callesen says after three years of hard work and hundreds of thousands of dollars spent on steering Plan Change 23 through the rezoning process, TTP has decided the time is right to offer the Mangere site for sale.

The land is held in eight separate freehold titles and was historically used to grow greenhouse tomatoes, says Harries. "Leaving it as horticultural sites was uneconomic, and TTP saw the benefit of the aggregated sites being rezoned as industrial rather than residential land.

"The council supported the plan change as there is a shortage of business land in the Manukau region. About four big players control the little available vacant industrial zoned land and they are mainly planning new buildings for lease, rather than selling sites."

The property has extensive road frontage to Favona and Walmsley Rds, views over the Manukau Harbour and it is within an established industrial precinct between Auckland's CBD and Auckland International Airport.

The site is generally flat with a gentle slope towards the harbour. Harries says modest earthworks will be needed and they could be completed within one season.

Under plans agreed to by the council, Robertson Rd is to be extended through the site so there is a central view shaft to One Tree Hill.

Callesen says the council eventually wants to see an esplanade reserve and walkway along the coast from Mahunga Drive to Norana and Workers Memorial Parks. "It is not promoting harbour development. Any buildings are to be stepped back."

The site is of a similar scale and nature to the TTP-developed Airpark 1 and 2 industrial subdivisions near the airport. Development concepts include buildings for distribution and freight forwarding companies, light manufacturing and a limited amount of office and retail on eight to 12 sites ranging from half a hectare to three hectares.

Harries says TTP has drawn up guidelines in conjunction with the council ensuring the quality of any development.

Callesen and Harries are expecting offers of more than $125 per sq m for the site. "Sales of smaller industrial zoned sites of about 4000sq m to 8000sq m in comparable locations have ranged from $250 per square metre to more than $350 per square metre," said Callesen.

"Allowing for the net to gross for roading within the development and subdivision costs, $125 per square metre indicates an attractive development margin based on comparative sales of smaller subdivided sites.

"This also represents a modest price for a big land user, who would not initially subdivide but develop the site for a single tenant."

Callesen says the area surrounding the site is home to a number of major companies, including Progressive Enterprises, Status Produce, Pengelly's, Hubbards Foods and Carter Holt Harvey.

TTP's property is 500m from SH20 and will benefit from roading improvements under way, such as the Mangere Bridge widening, the linking of SH1 with the Southwestern Motorway at Manukau and the Western Ring Route connection.

Once a big player in New Zealand's property market, TTP has gone from being the biggest commercial landlord during the mid-90s to a small development-oriented player.

The company sold most of its New Zealand and Australian property between 2003 and 2005 and moved its investment focus to Hong Kong and China.

TTP has made no secret of its plans to sell its other remaining New Zealand assets - a controlling share in Canterbury's Clearwater golf resort development and Man St carpark building in Queenstown.

Until World War II, Mangere played a major role in supplying food for the city markets.

After the war, the face of Mangere began to change from one of farms and market gardens to a rapidly growing suburb.

The development of the airport and the sewage treatment plant, combined with a large housing project designed for 25,000 people, saw rapid population growth.

Mangere is Manukau City's third most populous ward, and 37 per cent of residents are employed as professionals, managers or clerks and a further 40 per cent as either plant and machinery workers or in elementary occupations.

An Infometrics report shows manufacturing is the biggest employer in Manukau and at the end of last year accounted for 17 per cent of the area's employment.