Manukau auto hub units ‘drive’ each other
The four industrials units are within this auto hub complex at 132 Cavendish Drive, Manukau City. Photo / Supplied
Four commercial units, leased to three well-known vehicle service brands and located in an automotive hub in Manukau City, will be individually auctioned next month.
“The sale presents an opportunity to buy one, two, three or all four units,” says Stuart Bode of Bayleys who, with colleagues Mike Bradshaw and Tony Chaudhary, is selling the freehold unit-titled properties at 132 Cavendish Drive.
Featured in Bayleys’ latest Total Property portfolio, each unit will be auctioned individually on Wednesday, March 7.
Combined, the four units encompass more than 1638sq m of lettable space with wide street frontages and have 39 car parks.
Bode says they earn net total annual rent of more than $300,000 and this has potential for growth.
“The auto hub at Cavendish Drive is a popular destination for motor vehicle inspections, service and repairs. The businesses located there are complementary - driving custom to one another and strengthening the hub’s value proposition.
“Three of the units are being sold with long leases attached and would ideally suit investors looking for a steady revenue stream in a high-growth area.
“The fourth unit is being leased on a month-by-month basis, so will be of interest to both owner-occupiers and investors,” Bode says.
The properties for sale are:
- Unit A of 612sq m has 14 car parks and is leased to vehicle inspection firm VTNZ (Vehicle Testing New Zealand) until 2024. The lease has two three-year rights of renewal and generates annual net rent of $125,107 plus GST.
- Unit B of 353sq m with seven car parks is occupied by tyre-seller Cooper Tyres on a lease running until 2020, with one three-year right of renewal. It generates an annual net rent of $58,727 plus GST.
- Unit C of 391sq m with 11 car parks is also leased to VTNZ until 2024. The lease has two three-year rights of renewal and earns annual net rent of $61,400 plus GST.
- Unit H of 282sq m with seven car parks, is occupied by auto-parts supplier Partmaster on a month-to-month lease which generates annual net rent of $46,500 plus GST.
Unit A is occupied by automotive inspection firm VTNZ. Photo / Supplied
All four units are constructed of concrete slab walls and flooring, and steel roofing. They are zoned Business - Light Industry under the Auckland Unitary Plan and have been occupied by the current tenants since the hub was constructed in 2001.
Tenant VTNZ is New Zealand’s largest vehicle inspection company and has 85 branches across the country. Although it began as a state-owned enterprise, it is now owned by German multi-national Dekra.
Cooper Tyres has 22 branches across the country; while Partmaster supplies automotive parts for European and Japanese vehicles and has 17 branches nationwide.
Three other car-related businesses lease units at the Cavendish Drive automotive hub: vehicle service company Midas, used car chain Too Cheap Cars, and auto electrical company Papatoetoe Auto Electrical. Another unit is owned and occupied by bathroom renovation company Bath & Tile.
Bode says Units A, B and C offer buyers established brand name tenants combined with a prime location. “Individually, they could suit a first-time investor looking to enter the commercial property market, or an established investor looking to add an ‘in-demand’ asset class to a portfolio.
“The expiration of Partmaster’s long-term lease for Unit H presents an opportunity for owner-occupiers to move their business into a high-profile location. The property lends itself to multiple activities, such as a continuation of its current use, or as a warehouse/showroom.
“In addition, there’s a genuine opportunity for rental growth, as the rent was last reviewed in 2013.”
Tyre seller Cooper Tyres leases Unit B. Photo / Supplied
Bode says vacancy for commercial units on Cavendish Drive is near zero, with high demand for space due to the road’s high traffic flow, closeness to major arterial routes, strong public transport links and good local amenities. The properties are within walking distance of Westfield Manukau and Manukau Supa Centa which have plenty of food and beverage outlets.
Bradshaw says Cavendish Drive is a well-developed commercial area on the fringe of Manukau CBD and is a much sought-after address for small and large businesses.
“It has links to the Southwestern Motorway and Auckland Airport at one end and the Southern Motorway at the other.
“Being near the mall and retail park is an added convenience for those dropping their vehicles off for repair or inspection at 132 Cavendish Drive. The rail and bus stations also allow city workers to commute while their vehicles are being attended to.”
Bradshaw says commercial businesses in the area encompass a broad range of activities as well as the automotive-based businesses; including retail, showroom/warehousing, childcare and education centres.
“But it’s the location’s reputation as a hub for auto-related businesses that should drive interest,” Bradshaw says. “The automotive industry in New Zealand supplies and services one of the world's highest car ownership ratios.
Auto-parts supplier Partmaster is the tenant in Unit H. Photo / Supplied
“New Zealand Transport Association figures show there were 1.14 million used car transactions in New Zealand in 2017 - a record year for the market - and industry analysts predict that growth to continue.
“With the average age of a used vehicle in New Zealand rising to 14 years and used cars now clocking higher mileages than they did five years ago, businesses that deal in auto inspection, servicing and parts are an attractive proposition for commercial property owners.”
Bradshaw says 132 Cavendish Drive’s ‘value proposition’ is the symbiotic relationship between VTNZ and the repair and parts businesses surrounding it.
“VTNZ’s presence powers custom to the neighbouring businesses,” Bradshaw says.
“Similarly, the presence of auto repair shops next to VTNZ increases the chance motorists will choose it to inspect their vehicles, as any issues can be handily taken care of by the neighbouring businesses.”
According to NZTA figures, almost 40 per cent of warrant of fitness checks carried out in the year to June 2017 ended in failure - with inspectors finding faults in vehicles 1.7 million times.
Stuart Bode and Tony Chaudhary of Bayleys