A strategically-located Petone site billed as an industrial investment opportunity with returns to rival money in the bank, rental upside, and strong underlying land credentials, is for sale.
The property at 129 The Esplanade opposite Petone beach spans a high profile site between Fitzherbert and Sydney Streets. It was recently developed for anchor tenant Waitomo Energy Limited as a self-service fuel outlet, and also supports a tidy freestanding warehouse/workshop leased to Dig & Tip Earthworks Limited.
The fully-leased property offers a passive investment plus a pivotal esplanade site which benefits from triple street access and 60m of street frontage giving profile, ease of entry/exit and flexibility for any future redevelopment.
It is for sale by tender closing 4pm Wednesday 6th December via Ethan Hourigan, Fraser Press and Simon Butler of Bayleys Wellington Commercial.
The property currently returns annual net income after OPEX of $211,757 plus GST, with both leases having fixed rental increases – meaning projected net income for 2024 will be $220,473 plus GST.
The flat rectangular site is 1,895sqm in total with the predominant tenancy held under a ground lease to Waitomo Energy as an unmanned fuel stop. Waitomo has completed and owns all the improvements on a 1,591sqm parcel of land, including an extensive concrete forecourt, a car-wash facility and low-maintenance self-service kiosks with adjoining pumps.
As one of New Zealand’s largest independent fuel suppliers, Waitomo opened on the site in 2022, with this facility being its fifth in the Wellington region. It has a 10-year lease from 28 November 2021 with one, 10-year right of renewal and regular rental reviews to CPI and market.
The small standalone warehouse building occupied by Dig & Tip Earthworks was built circa-1981 with refurbishment and strengthening works to 55% new building standard completed in 2021. The warehouse has concrete slab foundations with a steel frame and a combination of concrete block and colour steel cladding. The stud height ranges from 5.3m at the knee to 6m at the apex.
This fully self-contained tenancy has modern kitchen and bathroom facilities and leverages the profiling opportunity and logistics access that the property boasts.
Dig & Tip has 6-year lease from 1 October 2021, with a further 6-year right of renewal and built-in annual rent increases.
Hourigan says the property’s local investor owner is looking to divest as part of a portfolio realignment and the low-maintenance straightforward offering is prompting enquiry from a range of investor buyers.
“Everyone accepts that the market still has some headwinds and yields have shifted somewhat, however properties with strong locational credentials and good leases are still attracting solid enquiry and buyer activity,” he says.
“Overall, the site is perfect for the current users and suitable for their long-term requirements so the dual tenancies provide an owner with a split-risk investment and the long-run advantage of favourable underlying land zoning for potential redevelopment.”
The property’s three street frontages, access ways onto Fitzherbert Street, Sydney Street and The Esplanade, and zoning underpins the site’s future capability.
“Petone Commercial 2 zone Is otherwise known as the ‘Mixed Use Zone’ which is flexible, has varying height overlays and encourages a broad range of uses including retail, residential, warehouse and office,” says Hourigan.
“There’s a substantial presence of destination retailers In the broader Petone precinct including PAK‘n’SAVE, Countdown, Bunnings, The Warehouse, Mitre 10 Mega, Kathmandu, Kmart, Briscoes and Rebel Sport and these businesses bolster the independent boutique retail scene in Jackson Street.
“Additionally, there’s been a raft of new development recently including industrial micro-units and multi-unit housing showing the wider appeal of the suburb.
“With Hutt City Council saying recently that the Lower Hutt population is expected to grow by 40,000 people by 2050, Petone is laden with potential.”