Penrose warehouse for sale

Being located at 19-21 Industry Rd, Penrose, places the property right at the heart of a thriving industrial area. Photo / Supplied

Six tenants from the automotive industry occupy a high-stud warehouse complex for sale at 19-21 Industry Rd, Penrose.

The property, which is being marketed by JLL agent John Binning, is for sale through an expressions of interest process, closing October 25 - unless sold earlier.

Binning says that comprising a combination of offices and some retail, it occupies a large 10,610sq m site in the heart of the well-established industrial area. Major tenants include McPhail Tyres and NZ Car Parts, who have committed to leases until 2019 and 2021 respectively.

The Heavy Industrial Business 6 zoning makes provisions for heavy and noxious uses, he says.

"The floor area to height ratio is two-to-one, which allows the possibility to build a significantly larger building, that could theoretically be twice the size, subject to meeting car parking requirements.

"The property was constructed in the 1960s, with extensive upgrade work taking place in 2003-2004 and an additional tyre warehouse was added in mid-2010. It is close to the South Eastern Highway and only 13km from Auckland's CBD.

"Being on such a large site and with industrial zoning, this property has many potential uses. There are a multitude of well-established businesses in the surrounding area with the location and accessibility to Auckland CBD, airport and motorways north and south add to the appeal."

The property is on leasehold land with the current ground lease commencing in 2000 for 21-years, plus right of renewal to Penrose Leasehold Ltd.

The gross annual income from the property is $538,000 with net earnings of $403,000 per annum.

JLL associate director of research and consulting, Tom Barclay says demand for industrial space is robust in South Auckland, with the precinct experiencing the highest levels of net absorption across the Auckland region.

"Even with unprecedented levels of new supply, vacancy rates remain low, with most developments concentrated around the Airport Corridor, East Tamaki and Wiri," says Barclay.

"Rental levels have increased substantially in the past few years and it is expected that rental growth will be the key driver of capital value over the next 12 months, with yield compression moderating."