12-year sale and leaseback
Kiwi-owned company Phoenix Metal Recyclers is selling its large Penrose industrial site on a new 12-year lease as the owners look to expand the business to meet growing demand.
The sale and leaseback presents an opportunity to invest in one of Auckland’s most tightly held industrial areas, with the benefit of strong tenant covenant and excellent lease terms.
Colliers International has been exclusively appointed to market the 5296sq m freehold property, at 2 Station Rd, Penrose, Auckland, by way of deadline private treaty.
Offers close at 4pm on Wednesday, September 4, unless the property is sold earlier.
Industrial director Hamish West, who is marketing the property with colleagues Paul Higgins and Ben Cockram, says it makes for a superb long-term investment.
“A lease of this length is unique for a property of this size, as they are usually reserved for much larger and higher-risk assets.
“This is a chance to acquire a substantial property that is well located in a low-vacancy, high-demand area, backed by an outstanding tenant in a sustainable growth industry.
“Phoenix Metal Recyclers is a 100 per cent New Zealand owned and operated metal recycling company that provides a full range of professional services throughout New Zealand and the South Pacific.
“The Penrose property is one of six sites across the North Island, and among the most recent additions to the company’s portfolio.
“It was acquired to serve as a key trade retail collection/drop-off facility due to its close proximity to the motorways and important customers, and also because its visibility builds awareness of the brand.
“With the business in growth mode, the owners are selling to free up capital for further expansion.
“This presents an opportunity for a savvy investor to share in the company’s success through strong rental returns over the long term.”
Eldon Reeve, managing director of Phoenix Metal Recyclers, says the company is committed to future growth.
“We are looking to develop new and existing sites for the group as our business continues to benefit from strong demand.
“Metal recycling is an exciting global industry and is great for the environment. By recovering re-useable metallics, we are not only diverting material from landfill, as an industry we are also reducing the depletion of natural resources.
“We believe the recycling sector has a significant part to play in our disposable society, as we continue to push towards a cleaner and greener New Zealand.” The Penrose property offers investors a new 12-year lease from settlement, backed by a sixmonth bank guarantee.
The lease returns $395,000 in net annual rent, with fixed annual rental increases of 2 per cent. There is also one mid-term market rental review, capped at 5 per cent.
An eight-year right of renewal provides for a final expiry date 20 years from settlement.
Higgins says the property comprises a 2606sq m industrial facility on a massively high-profile site on the corner of Great South Rd and Station Rd. “The property comprises two standalone industrial buildings made up of clear-span warehousing with high stud heights, as well as associated office accommodation and amenities.
“Building 1 is the larger of the two and comprises offices and amenities over two levels, as well as a warehouse to the rear of the offices. Building 2 is primarily a warehouse. The remainder of the site is made up of sealed asphalt yard with secure fencing. Access to the site is via a single entrance off Station Rd.”
Light Industry zoning allows for a wide range of activities including manufacturing and distribution.
Cockram says the property enjoys access to motorways and main arterial roads, with the State Highway 1 interchange only minutes away.
“It is located in the heart of Penrose, which is one of the closest industrial precincts to Auckland’s CBD. The suburb continues to be one of the best performing industrial locations in Auckland, with demand from tenants and investors outstripping supply.
“Its proximity to key staff catchments, ports, Auckland airport, highway links and its central Auckland location continue to drive demand in the area. Continued redevelopment will ensure Penrose remains one of Auckland’s premier industrial precincts.”
Tenant Phoenix Metal Recyclers was originally established in 1985 as Scrap Metal Recyclers.