Hawke’s Bay meat worker housing ripe for picking
A fully-leased 15-unit asset in Hawke’s Bay is expected to be welcomed by the investor market looking for a passive opportunity underpinned by strong regional fundamentals.
Formerly operating as a motel, the property at 4 School Rd, Clive, between Hastings and Napier, currently provides worker accommodation for New Zealand's leading meat exporter, Silver Fern Farms.
Recently refurbished inside and out, the wellpresented and efficiently configured accommodation offering is low maintenance and requires minimal management input from an owner.
It features 11 studio units, two one-bedroom units and two two-bedroom units with a total floor area of 643sq m, on 1385sq m with a fully-sealed yard and 21 on-site carparks with security camera surveillance.
The larger units have full kitchens, the studios contain kitchenettes, there is reticulated gas hot water and heat pumps in all units, and fibre has recently been connected to the property.
The Clive-Whakatu Suburban Commercial zoned property returns net annual income of $466,300 plus GST and outgoings, with Silver Fern Farms Ltd approximately 12 months into a five-year lease term with further five-year (total) rights of renewal, and rent reviews every three years from 2025.
Kerry Geange and Jodie Woodfield of Bayleys Napier are taking the property to tender, closing 4pm, Thursday 23 February, unless sold prior.
Geange says the commercial investment market remains strong in Hawke’s Bay with well-located stock that has sound tenant covenants and income flow selling quickly. “Investors from outside the region see Hawke’s Bay as a desirable place to put their money due to a buoyant regional economy on the back of healthy returns in the primary sector, the well-performing and expanding Napier Port, robust domestic tourism and a rebounding international tourist market as cruise ships return.
“Local and regional councils are forecasting ongoing growth, and prominent economists are equally positive about the region in the medium and long-term.”
Companies aligned to the primary industries are having real challenges around attraction and retention of workforces, so those able to assist with accommodation are finding recruitment easier.
“The property at Clive is a great example of a fit-forpurpose asset that enhances Silver Fern’s reputation as an employer,” says Geange. “A buyer for the property could likely have an affiliation with the primary sector, whether that’s ex-farmers wishing to diversify into a commercial investment that supports the sector, or existing operators in the area with eyes on the future.
“Primary industry companies with ambitious growth plans could recognise value in acquiring this property, taking the income from it until the end of the existing lease term, and then absorbing it into their own business model.”
Geange says the residential rental market is really tight in Hawke’s Bay, and growers and producers are impacted by this.
“Many rely heavily on the overseas labour market at harvest and other key times on the production calendar, and Hawke’s Bay is one of the biggest employers of Registered Seasonal Employer (RSE) workers in the country with producers having clear responsibilities to house these workers.”
Roading and improved infrastructure initiatives from local councils and Waka Kotahi in the past 10 years has improved accessibility and traffic movement around Hawke’s Bay, with Geange saying this has streamlined efficiencies for the business community and local industry.