$16.5m deal at Tauranga port: not chickenfeed
Bayleys Real Estate salespeople have recently concluded one of the Bay of Plenty’s largest industrial transactions for the last 12 months.
Bayleys salesperson Rory Brown says while 2023 was challenging for the property sector, the new year has started on better footing, and purchasers are focused on the fundamental tenants of investment, including property location and income.
“Our largest recent sale was 10.239 ha adjacent to the Port of Tauranga, which sold for more than $16.5 million in a deal facilitated with my colleagues Christy Arundel and Lloyd Davidson.
“We received significant interest from buyers right across the country for the property at 170 Totara St, which features specialised industrial structures, warehousing and associated office accommodation.”
The asset was sold following a comprehensive marketing campaign using Bayleys’ multi-channel Total Property portfolio.
Arundel says investor appetite for the property was encouraging and reflected a healthy degree of interest for premises that are secure and easily accessible via key transport links.
“Ownership of industrial property near the Port of Tauranga is generally very tight, with the location near Mt Maunganui’s urban boundary limiting future capacity for expansion.
“A chronic shortage of industrially zoned land available for future development and vacancy rates which are near record low levels saw investors recognise the underlying value of this asset, attracting eager interest regardless of the economic climate.”
Benefiting from a high degree of main road exposure, 170 Totara St is 5km from Tauranga’s CBD. Specialised manufacturing structures include a boiler, feed mill and tower, loadout hoppers, silos, grain intake building, workshop areas and a weighbridge/control room office.
Davidson said a long-term lease to Ingham Enterprises, the international wholesale chicken supplier and poultry business, was a significant feature.
“The property returns $1,013,963 net per annum plus GST and outgoings from a lease of 20 years with fixed annual rental growth, reflecting a yield of approximately 6.09 per cent on the sale.
“That yield is a solid return on investment, indicating confidence for future income and value appreciation— critica lf actors contributing to stability that purchasers respond to.
“Investors also understand the ongoing demand for industrial premises near key freight hubs. Off the back of a record yea r in leasing transactions for Bayleys in 2023, we expect rental growth will continue to be a key determinant of property value, counterbalancing market headwinds.”