Hub status favours Cromwell industrial

The freehold property at 27-31 McNulty Rd is for sale as one parcel or as five individual titled lots. Photo / Supplied

A prime 1.95ha industrial site for sale in the Central Otago hub of Cromwell offers a split-risk investment with development potential.

Colliers International Queenstown director Mark Simpson is marketing 27-31 McNulty Rd for sale by tender, with colleagues Rory O'Donnell and Dean Collins.

The freehold property, spanning five titles in the heart of Cromwell's industrial precinct, is offered as one parcel or as five individual titled lots.

Simpson says the high-profile site comprises three fully-leased industrial buildings on their own titles, leased to Expol and PBT (Peter Baker Transport), plus a tenanted fuel stop leased to Chevron, and a vacant road front development site.

"This is an excellent split-risk industrial investment with very good tenant covenants and the potential to develop the remaining site to generate further income," he says.

"The property is well positioned in a prime industrial location on McNulty Rd - the main industrial arterial route through Cromwell - which is itself strategically placed between the fast-growing tourist hotspots of Wanaka and Queenstown, making it a Central Otago strategic hub."

Simpson says the property is earning a total net annual income of $389,224 from the four leases.

The tenants are national logistics company PBT Transport, national insulation company Expol, and fuel retailer Caltex (Chevron).

O'Donnell says Cromwell serves the local horticultural and viticulture sectors, which rely heavily on transport and logistics related tenant uses.

"Growth in the last two years has been strong, with the residential population growing alongside the town's infrastructure as its Queenstown and Wanaka neighbours continue to boom."

A 4000-strong population is served by a range of amenities, including two primary schools, a high school, two medical centres and an established town centre.

"Cromwell's industrial sector is growing thanks to the town's strategic position within Central Otago, the shortage of affordable industrial opportunities in Queenstown, and continuing demand for land in the industrial, logistics, horticulture and viticulture sectors," O'Donnell says.

Collins says the McNulty Rd property is zoned as an Industrial Resource Area under the Central Otago District Plan.

"The vacant lot, fuel stop and Expol properties all have good road frontages, giving them maximum exposure to traffic coming off State Highway 6 and through Cromwell's industrial area," he says. "The remaining two lots have road access down either side of the empty lot, which sits in the centre of the site."

Expol occupies Lot 1, a 5618sq m property to the southwest of the site, on a lease earning $125,000 per annum net and expiring in December 2022.

PBT occupies the rear Lots 2 and 4 - two adjoining properties to the north and northeast of the site, with areas of 4906sq m and 3496sqm respectively. Both leases combined generate $209,811 in rent per annum.

"All three buildings have the capacity to be expanded - Expol and PBT have both indicated a desire to increase their building sizes in the near future," Collins says.

The Caltex fuel stop on Lot 5 occupies a 2652sq m property to the southeast. The lease earns $54,413 per annum net, with the current term expiring in August 2021.

A vacant property, Lot 3, occupies 2838sq m at the road front centre of the site.