Former butter store a rare fringe find

5:00 AM Wednesday November 16, 2016 Paul Charman

This former butter store is centrally located with plenty of options for future use.

A large Mt Eden property — originally used as a butter store — is now for sale, creating an unusual purchase opportunity on Auckland’s city fringe.

So says Colliers International’s Peter Kermode, who is selling the former NZ Co-operative Dairy Company butter packing plant with colleagues Jonathan Lynch and Josh Coburn.

Kermode says the size, location and history of the property means there is little to compare to, “and the mixed-use zone is particularly attractive”.

Tenders for the large (3371sq m), property at 1A Porters Ave will close on December 7.

The property, now owned and occupied by the exhibition, trade show and trade display services provider, Peek Corporation, says Kermode. “They’ll take a short-term lease to continue to occupy for between 12 and 24 months, generating around $416,000 in net annual rental income.

“Peek Corporation is relocating because the buildings at Porters Ave no longer suit their business requirements. This opens up a tremendous opportunity for an owner-occupier or investor to secure a large landholding on the city fringe.”

“With its history as a butter packing plant, this has to be one of the more interesting properties we’ve come across in Eden Terrace,” says Lynch. There are many possibilities for the site, Coburn says. “The property lends itself to splitting into two tenancies — one upstairs and one down. Both tenancies would offer ground level access and a mix of office and warehouse components.”

This feature broadens the buyer market to smaller owner-occupiers, who could opt to take 1200sq m of space (or more) for their own use and then lease out the balance to create an income stream, he says.

Kermode sees growing demand for city-fringe property among owner-occupiers and tenants.

“There’s been a marked increase in the popularity of commercial properties in Auckland’s inner circle of city-centre suburbs over recent years,” he says.

“Commercial properties in good locations near the CBD are in high demand, so we expect this large property to attract a lot of interest.”

Business owners know a location close to the city centre can offer many benefits, with mixed-use zoning and double Grammar zone location representing added advantages, opening up future options for residential development, says Lynch.

“A central location cuts both transport costs and time for companies which service the CBD, and can also help businesses attract and retain staff.

“Smart business owners also have an eye for potential future upside. They might buy a commercial property and run their business from it for five or 10 years, by which time it could well be ripe for redevelopment into apartments.”

The potential for an apartment development is strengthened by the site’s uninterrupted and protected views to the Waitakere ranges, as well as its location 200m from Mt Eden Train Station, he adds.

Meanwhile, increased demand for city fringe warehouse space has brought in supply constraints, Coburn says.

“There are few opportunities to increase the supply of city fringe commercial properties to meet demand, so properties like these tend to get snapped up.”

The site is set to benefit from development associated with the City Rail Link project, Coburn says.

“There is a big increase in the construction of apartment, office and showroom developments on former light industrial sites in this area and we expect increases to both land values and rents as a result of the rail link.”

The site, bounded by three roads and the railway line, provides net lettable floor area of 2,760sq m and 28 car parks.

Originally constructed in the late 1960s, the building was once occupied by the New Zealand Co-operative Dairy Co.

It is thought to have been converted to its present use in the mid to late 80s. Further alterations were undertaken in the early to mid-1990s.

It is of extremely solid construction and provides a very high floor load capability, provides various high-stud warehouse and workshop areas along with well-presented offices, amenities and an open-air roof terrace on the upper level.

The property, which has dual road access, is 3km from downtown Auckland and equidistant from Newmarket and Grey Lynn, providing easy access to the CBD and other key suburban business hubs, Kermode says.

“It is just perfect for businesses looking to take advantage of a location close to the village centres of Mt Eden and Kingsland; plus the nearby cafes, supermarkets, schools, Mt Eden Station, arterial roads and the motorway network.”