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Tauranga feed mill sale rocks the harbour

Salespeople from the country’s largest full-service real estate agency, Bayleys Real Estate, have recently concluded one of the largest industrial transactions for the Bay of Plenty region in the last 12 months, reflecting enduring demand for well-located property.

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 10.239sqm (more or less) adjacent to the Port of Tauranga, which sold for $16,650,000 in a deal facilitated with my Bayleys colleagues Christy Arundel and Lloyd Davidson.

“We received significant interest from buyers right across the country for the property at 170 Totara Street, which features specialised industrial structures, warehousing and associated office accommodation.”

The unique asset was sold following a comprehensive marketing campaign utilising Bayleys’ multi-channel Total Property portfolio, which recently celebrated its 25th year in publication.

Bayleys salesperson Christy 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 –the country’s largest container port by volume – is generally very tight, with a location near Mount 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 Street is five kilometres from Tauranga’s city centre, with niche site improvements. Specialised manufacturing structures include a boiler, feed mill and tower, loadout hoppers, silos, grain intake building, workshop areas and a weighbridge/control room office.

Bayleys salesperson Lloyd Davidson said a long-term lease to international wholesale chicken supplier and poultry business Ingham Enterprises was a significant property 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 percent on the sale.

“That yield is a solid return on investment, indicating confidence for future income and value appreciation - critical factors 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 year in leasing transactions for Bayleys in 2023, we expect rental growth will continue to be a key determinant of property value, counterbalancing market headwinds.

“We would like to extend our gratitude to the vendors for their vote of confidence in our team to achieve a successful result.

“For more information about this sale or to discuss your commercial property requirements in more detail, please contact Rory, Christy or myself.”

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