Big Nelson industrial has low site coverage

The six-hectare property at 490 Nayland Rd is in Nelson's industrial heart of Stoke. Photo / Supplied

A six-hectare property, fully leased to three corporate tenants on short-term leases, is for sale in Nelson's industrial suburb of Stoke

A subsidiary of T&G Global Ltd, the New Zealand publicly listed fresh produce company, is selling the property which operates as a processing facility.

"The value add opportunity here is huge," says Ken Montgomery of Colliers International Nelson, who with colleagues Sam Staite and Greg Goldfinch, is marketing 490 Nayland Rd for sale by deadline private treaty, closing at 4pm on Thursday June 13.

"The building site coverage is less than 30 per cent and the rental rates are low," Montgomery says. The complex's covered floor space of about 18,000sq m sits on a total 6.1680ha land site in three major and one minor titles; and is strategically located between Nelson and the Richmond suburban centre.

Staite says the property is now surplus to T&G Global's requirements following the sale of its processing business. Major structures encompass:

• dry store/warehousing of around 4100sq m;
• adjoining processing facility of 1450sq m;
• 1165sq m of supporting amenities including offices;
• cool store complex of 5400sq m plus 3000sq m of canopy;
• juice extraction plant of 2,680sq m; and
• ancillary workshop, boiler room, effluent treatment plant and weighbridge.

The three short term leases have final expiry dates ranging from October 2020 to June 2021, Staite says. "This affords a purchaser the benefit of significant interim revenue while progressively regaining control of the property over the next two years.

"The repurposing of the buildings, combined with large scale infill, could result in this property becoming a major industrial hub with substantial revenue streams."

Staite says the property has excellent profile with a 324m frontage onto Nayland Rd and is adjacent to busy State Highway 6 on its western boundary.

"It offers excellent heavy vehicle access in all directions with an on land off ramps on its boundary. Nelson's airport, port and CBD are all less than 9km away via normal transport routes."

Montgomery says Nelson industrial space for sale or lease is in short supply.

"Nelson district's major industries are all trading strongly, creating buoyant economic conditions. We're experiencing high levels of commercial and residential development and have very low industrial vacancy rates.

"Industrial zoned land is scarce with limited scope for new releases of land. Any new land coming onstream is out to the south of Richmond.

"The majority of sites within Nayland Rd's south industrial zone have been developed in the last decade or so, resulting in a modern estate accommodating a diverse range of business activities. Nelson City Council does not differentiate between light and heavy industrial activities with its zone designations."

Montgomery says that, in keeping with the population distribution, a hefty majority of commercial transactions occur in Nelson City, while the Richmond area is experiencing fast residential construction growth. So Nayland Rd, located between the two centres, is ideally suited to service both centres.

"Nelson's idyllic setting between the mountains and sea has ensured a scarcity of industrial property and the economy is experiencing a prolonged period of growth with no foreseeable headwinds.

"It has consistently been one of New Zealand's fastest growing regional economies and often referred to as an emerging Otago. Its major industries are fishing, forestry, horticulture and tourism all of which are booming. Employment and residential growth are strong. Commercial building consents are at an historically high level.

"Investors are attracted by the provincial yield premiums available and can still achieve a worthwhile margin above cost of funds on quality assets. Out of town purchasers are a significant market influence."

Vendor T&G Global is one of New Zealand's largest vertically integrated growing, packing, shipping and marketing companies.

Last year, Colliers help it divest its purpose-built Christchurch distribution centre in a sale and leaseback deal for $14.5m.