This VTNZ station is for sale at 51 Marguerita St, Rotorua.
This VTNZ station is for sale at 51 Marguerita St, Rotorua.
A freehold property occupied by a Vehicle Testing New Zealand (VTNZ) motor vehicle inspection station in Rotorua and featured in Bayley's latest Total Property portfolio magazine will go under the hammer next month.
"The VTNZ business provides vehicle inspection services to trucks, small passenger service vehicles and larger coaches, as well as issuing car registrations, road user charges and driver licensing," says Mark Rendell of Bayleys Rotorua who is marketing the premises, for auction on April 16.
"The quality of the tenant is an important factor in assessing the investment fundamentals for any light industrial building like this," Rendell says. "The growing demand for the services delivered by VTNZ Rotorua reflects not only the value of the brand, but also the growth in its market share of vehicle inspections in the city and this will give confidence to investors."
The property, zoned Industrial A, occupies a 3595 square metre site with dual access from White and Marguerita Streets. VTNZ has a 10 year lease on the 1130 sq m building paying annual rent of $143,362 plus GST per annum, with a first right of renewal in 2024 and four more three-year rights of renewal - taking the potential expiry through to 2036.Rental increases every three years are linked to the Consumer Price Index (CPI).
The single-storey multi-use building comprises reinforced block walls with cantilevered concrete columns and steel trussed ceiling with two car lanes and two heavy vehicle lanes. "In 2013 the landlord carried out significant redevelopment work at a cost of more than $369,000 to accommodate truck and trailer and bus inspections - reflecting the high volume of trucks and tourism transporter vehicles now operating in and around Rotorua," Rendell says.
"Access and exiting has been made easier for these bigger vehicles with a substantial yard at the front of the premises and dual road frontage allowing the convenience of drive through.
"The tenant has agreed to pay this redevelopment loan back, with interest, over a 10 year period at $3824 plus GST per month. This makes the total income for the first 10 year period up to 2023 a total of $189,254 plus GST."
The property has a New Building Standard (NBS) rating of between 72 to 95 per cent - equivalent to a Grade-B seismic risk - and encompasses administrative offices, waiting rooms, staff lunchroom, and amenities. A variety of other businesses in the area include engineering companies, kitchen suppliers, joiners and rural supply retailers.
Rendell says the building was originally designed with more a 'public' clientele in mind in the form of cars, domestic-use trailers, motorcycles and small trade vehicles.
"The latest economic data justifies the decision to take a broader approach to servicing commercial vehicles alongside the traditional household cars," he says.
"According to an Infometrics report, 552 commercial vehicles were registered in the Rotorua district in the year to December 2014 an - eight per cent increase while car registrations rose by 25 percent."
Rendell says the VTNZ business is a reflection of the improving state of Rotorua's commercial sector. Economic data research and analysis agency Infometrics reports that the city's economy grew by 2.9 per cent in the 2014 year and is now 15 per cent bigger than it was during the post-global financial crisis trough of 2009/2010.
"Retail trade in Rotorua is growing at a robust rate. Tourism activity has grown quickly over recent months and represents 9.8 per cent of Rotorua's gross domestic product. Forestry export prices have recovered and conditions in Rotorua's labour market have improved," Rendell says, quoting the Infometrics report.
VTNZ, which is New Zealand's largest vehicle inspection company, was formerly known by its full name, Vehicle Testing New Zealand, before re-branding to its acronym in 2004.
VTNZ was launched in 1994 as a state-owned enterprise following a review of the Ministry of Transport. It was privatised in 1999 and purchased by the Motor Trade Association. Also in 2004, VTNZ purchased the business of On Road New Zealand. On Road added another 14 stations and 250 staff which at the time increased VTNZ's coverage to 75 testing stations nationwide with staff numbers close to 1000.
In 2008 the On Road stations were rebranded to VTNZ there are now distinctive bright orange 82 VTNZ testing stations nationwide carrying out warrant of fitness inspections. The brand is 60 per cent owned by German-based automotive testing/inspection/certification company DEKRA SE.
