Lease signings signal airport’s popularity
Bendon signed up to a five-year lease at 8 Airpark Drive, Airport Oaks. Photo / Supplied
The growth of e-commerce, plus route changes following the opening of Waterview Tunnel have intensified demand for industrial premises near Auckland International Airport.
Bayleys’ South Auckland industrial team recently concluded five substantial leases in the airport industrial precinct, which will generate total net annual rent of close to $4,879,000 plus GST, for their respective landlords.
South Auckland manager Scott Campbell, also Bayleys national director industrial and logistics, says expansion in e-commerce is among key factors driving the precinct’s popularity. “With ever more sales being done via the internet, speed to market is crucial; locating modern distribution centres close to airports and motorway networks provides competitive advantage,” he points out.
“The Waterview tunnel and the associated western ring route has enhanced the airport’s connection to the rest of Auckland, providing faster access to west Auckland and markets north of the harbour bridge.”
The largest of the Bayleys’ leases encompassed a net lettable area of 9816sq m, on 1.6377ha of land at 8 Airpark Dr, Airport Oaks.
With longstanding tenant Bendon NZ’s lease expiring without renewal rights, Campbell and colleague Jamsheed Sidhwa took the property to the market for lease. Following an in-depth analysis of tenancy options, Bendon secured a new lease, says Campbell.
“We negotiated a deal that worked for both parties; the landlord retained flexibility by not including further rights of renewal in the lease.”
Bendon will use the premises as its national head office and distribution centre, the latter including a 5577sq m high-stud warehouse with a 1345sq m breezeway canopy.
Another lease has been signed by third party logistics provider DB Schenker NZ Ltdfor an 8652sq m high-stud warehouse and office building on 1.33ha of land, at 8 Amelia Earhart Ave. Jamsheed Sidhwa says the property is in “the final part of a two-stage master plan for expansion at Auckland Airport“. With 150m of high-profile exposure to George Bolt Memorial Dr, the property was occupied untilrecently by Toll Logistics, which has consolidated its operations at the Savill Link business park in Otahuhu.
DB Schenker is owned by the German logistics giant Deutsche Bahn, whichdescribes itself as the world’s second largest transportation and logistics services provider.
Early last year, before the 8 Amelia Earhart Ave lease, Sidhwa negotiated the 10-year-lease of 7500sq m of logistics space, on a 1.21ha site, adjoining 4 Amelia Earhart.
Sidhwa says the company has significant expansion plans and the integration of its airport operations across these two properties will almost double its warehousing capacity in the location.
In another leasing, a substantial landholding and warehouse building at 9 Richard Pearse Dr, Airport Oaks, was tenanted to Apollo Motor Homes for 10 years. Campbell, who negotiated the lease with Nick Bayley, says a significant attraction for the ASX listed tenant was the significant amount of undeveloped land on the 1.71ha site.
He says the company will use the property for the renting and sale of vehicles and will also have access to 4328sq m of high-stud warehousing and 994sq m of office accommodation.
Sidhwa also negotiated the lease of a duplex comprising two new high-stud warehouse and office premises speculatively developed by Auckland International Airport Ltd at 15 Maurice Wilson Ave, in The Landing business park.
These were leased to separate tenants for a total net annual rental income of $971,790 plus GST. Furniture company Early Settler has taken a new five-year lease over a net lettable area of 4288sq m.
And, in conjunction with Nelson Raines, Sidhwa negotiated a six-year-lease of 3678sq m to Sheppard Cycles, which describes itself as Australasia’s largest bicycle distribution company.
Nick Bayley also negotiated more Airport Oaks’ leases to two logistics companies:the six-year-lease of Unit 8, 113 Pavilion Dr with 1822sq m of high-stud, clear-span warehousing and modern office/amenities; and a four-year-lease over 960sq m of warehouse and office space, on a 2400 sq m site at 99 Montgomerie Rd.
Bayleys Research has found the airport precinct’s industrial vacancy rate has halved since 2015 — from 3.1 per cent to 1.5 per cent.
This is despite significant development activity over the past three years which has added close to 30 per cent more industrial space in the airport area assessed.
Sidhwa says construction around the airport has expanded substantially, due to large complexes being purpose-built for expanding businesses and speculative development.