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Converted dairy factory could be cream of crop for commercial property investors

An historic converted dairy factory that once delivered milk across Hamilton and now houses a cutting-edge electronics business has been placed on the market for sale.

The building’s Art Deco façade at 436A State Highway 26, in Newstead, is a familiar sight for motorists travelling the busy route between Hamilton and the beach resorts and holiday-homes of the Coromandel.

Constructed in 1935, just after the Great Depression, the Newstead milk supply plant (initially the Hamilton Co-operative Pure Milk Company) traded through WWII before being bought by the NZ Co-operative Dairy Co in 1947.

It was co-founded by Frederick Lye, who served as a member of parliament for Waikato for more than a decade in the 1920s and 1930s. He was awarded the King George V Silver Jubilee Medal in 1935 for his contribution to the community.

Offered to the market for the first time in 25 years, the property is currently home to an established electronics business. With good road profile and signage opportunities to passing traffic, it is expected to appeal to investors and owner-occupiers, including first-time commercial property investors.

Located just a few minutes east of Hamilton, the rural countryside around Newstead has long been a hotspot for rural-residential lifestyle properties. The area is also enjoying the benefits of improvements to regional transport links, led by the soon-to-be-completed Waikato Expressway.

The property at 436A State Highway 26 is being marketed for sale by auction on 3 December, if not sold prior, through Bayleys Hamilton.

Salespeople Jordan Metcalfe and Rebecca Bruce said the Newstead property for sale consisted of a building of some 234 square metres on a quarter share of an approximately 4,074-square metre cross-leased site.

Mr Metcalfe said the building incorporated a high-stud, clear-span workshop space equipped with three-phase power, plus separate offices and additional storage, supported by external yard space and parking.

The property is leased to Pure Electronics, which develops high-tech products and solutions for industrial and commercial businesses. Its tenancy generates net rental income of $25,000 plus GST and outgoings, on a lease that extends through to 2021.

However, the lease agreement includes a right to earlier vacant possession if the property is bought by a new owner-occupier.

“Built in the mid-1930s as a dairy factory, this Art Deco-style property has a fascinating historical back-story and heritage features which have seen it put forward for a Heritage-B ranking under the proposed Waikato District Plan,” said Mr Metcalfe.

“Decades on, the changed nature of this area, the establishment of national transport networks and sprawling city growth bodes well for its future returns.”

The Newstead site has an underlying Rural zoning from Waikato District Council and resource consent for light-industrial activity.

Ms Bruce said commercial and industrial property in Newstead had traditionally been in short supply. However, a booming population in recent years had led to an increase in demand and some commercial development.

The Waikato settlement is home to the global headquarters of the multinational farming co-operative, Livestock Improvement Corporation (LIC), which supplies genetics information to the dairy sector. Its sprawling site incorporates a farm, research centre, laboratory and testing facility – drawing workers from across the district and neighbouring Hamilton.

DairyNZ’s head office is also located nearby – a dairy farmer-funded research, education and advocacy organisation. Opposite the property for sale is DairyNZ’s Scott farm, and behind that, Lye farm – a link back to the dairy factory co-founder.

Ms Bruce said the area’s popularity as a rural-residential lifestyle location had helped to fuel rapid growth in recent years. “The area’s population leapt by 20 percent to nearly 1,600 in the five years to the 2018 census, and has grown by 50 percent since 2006,” she said.

“Just a few kilometres to the west, Hamilton provides a large and growing catchment as well as ready access to a wide range of city amenities.

“Positioned on State Highway 26, the Newstead site for sale has excellent transport connections across New Zealand’s ‘Golden Triangle’ linking Auckland, Hamilton and Tauranga. This location will get another major boost soon with the completion of the nearby Hamilton section of the expressway,” Ms Bruce said.

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