Sales signal industrial sector rebound

The sale of the distinctive 'Rubik's Cube' building in Penrose, for $3.925 million, is one of several deals in a recovering industrial sector. Photo / Supplied

Recent sales of several substantial warehouse and factory premises in the Auckland industrial precincts of Penrose and Mt Wellington indicate that demand for industrial property is picking up.

Mike Houlker, the industrial manager for Bayleys Real Estate in Auckland, says the industrial sector is traditionally the first sector to recover from a downturn in the market and there are definite signs of increased demand for vacant buildings from owner-occupiers.

"It started last year at the smaller end of the market but more recently has gathered further momentum to include quite large buildings which were vacant for a considerable time," Houlker says.

The largest transaction involved a 5284sq m industrial building on a site of 9879sq m at 10-12 Autumn Place, Penrose, which was sold for $5.2 million by Houlker and David Gubb of Bayleys Auckland. The property has 4704sq m of warehouse and factory space with five roller doors, container store, excellent truck access and 580sq m of office.

Gubb says the industrial complex was purchased by a plastics manufacturer looking to expand business. It's the third time that Houlker and Gubb have sold this property with previous sales in 2001 and 1997 at $4,265,000 and $3.2 million respectively.

One of Penrose's most distinctive industrial buildings, a 4760sq m complex on a 7378sq m corner site at 300 Church St, Penrose, sold for $3,925,000. It was originally built for Smith & Smith Glass and was subsequently occupied by a courier company.

The giant glass "Rubik's Cube" at the entrance to the property makes it a stand-out building in the area.

It has 4103sq m of warehousing with 10 roller doors plus 453sq m of office and showroom space over two levels, with a further level above of 202sq m housing a cafeteria, conference and board room.

This sale to a relocating furniture company was negotiated by Houlker and James Hill, of Bayleys Auckland - Mark Pittaway of Bayleys Manukau introduced the buyer.

Hill also sold a vacant 1182sq m industrial unit nearby at 343 Church St, Penrose for $1,250,000. This has 954sq m of warehouse, 228sq m of office space and 26 car parks

In Mt Wellington, a 2181sq m industrial unit at 4B Rakino Way has sold vacant for $2,140,000 through Houlker, Gubb and Sunil Bhana of Bayleys Auckland, and Rob Farmer of Bayleys Manukau. It has 1451sq m of high-stud warehousing with dual roller door access and 724sq m of recently refurbished modern office space over two levels.

The industrial unit was purchased by a manufacturer in the electronic and electrical industries. Again this is the third sale of this building for Houlker and Gubb. It sold in 2004 for $2,110,000 and in 1997 for $1,940,000.

Houlker says the buildings in both Rakino Way and 300 Church St had been vacant for more than a year. He says the pick-up in sales of this type of property is due to a number of factors including an increased supply and choice of empty buildings and lower interest rates, which can make the leveraged acquisition of property more financially appealing than leasing.

"Also, while vacant buildings were selling at a relatively slim discount to tenanted properties last year, that discount gap now appears to be widening which means businesses are also being attracted to some pretty good buying opportunities in the market at present."