Seven tenants on the property - returning a combined yearly net income of $95,365 in the purpose-built office complex – generate substantial income.
Although four offices are vacant and if leased could give a potential total annual gross income of about $130,000, the value of the property is in the 5025 square metre site, worth about $1 million alone, according to Bayleys Hamilton salesperson Josh Smith.
Mr Smith and Bayleys Hamilton colleague Daniel Keane are marketing the property at 25 Allen Road, Morrinsville for sale by auction at Hamilton on September 26.
Mr Smith said the commercially-zoned property, with a Matamata Piako District Council rating valuation of $1.4 million, had the potential to be entirely redeveloped for a major national tenant or the existing building upgraded and extended for an anchor tenant.
“There has been good interest in the vacant offices and two potential tenants are considering them now,” Mr Smith said.
“The property, one block back from the main business centre, offers an investor or developer substantial upside with good growth off the back of its proximity to Hamilton and being the main support town for the Waikato's greater dairy industry,” he said.
“It offers numerous opportunities from capitalising on development of the land holding, redeveloping the offices to attract high end tenants, continuing as a hands-on investor or land banking for possible future development.
'Because the property is so close to the CBD it would appeal to service industries wanting a central location for customer contact,” Mr Smith said.
A developer, he said, after consulting the council, could look at redeveloping the whole site for a workshop/storage warehouse with associated office, a small big box retail development, or providing the site for one big national tenant, such as Mitre 10 or Bunnings. Fonterra is directly across the road.
Permitted activities under the council's zoning bylaws allow for the creation of business activities such as retail, offices, medical services, light industrial operations, or indoor/outdoor storage facilities.
Mr Smith said the local body guidelines should allow astute property developers to build premises which would find quick council approval through the necessary consenting process, while also taking care of the future tenancy market.
“It will be appealing because there is limited available commercial and industrial land that is already connected to services because of development and building intensification limitations on the provision of reticulated water, stormwater and wastewater services to the north of Morrinsville, combined with the positioning of electrical transmission lines, sewerage ponds and peat soils, which will steer future expansion along the SH26 corridor,” Mr Smith said.
The Matamata Piako District Council's Town Strategies 2013-2033 Morrinsville document says there will be a demand for eight hectares of business land by 2033.
Mr Smith said some of the additional demand can be accommodated in the CBD.
“However, for other businesses, expansion will see the previous city/country belt encircling Morrinsville stretch further out into what were previously considered the fringe countryside locations,' he said.
The existing 828 square metre Allen Street building was purpose-built to a high standard in 1980 for the Matamata Piako District Council and has a seismic rating of 78 percent of New Building Standard.
The tenants include some that a particularly related to the rural sector – Assure Quality, Dairy NZ, ETEC Crop Solutions, Equine Productions and Surveying Services. Outgoings for the seven tenancies are $31,033 on gross yearly rental of $126,399.
Constructed of concrete block walls, with a weatherboard cladding, the property has a modern appearance and multiple offices split across two floors and good staff facilities.
“Tenants are provided with a private work environment while still feeling part of a bigger team,” Mr Smith said. “It is not often a Morrinsville property of this scale and enormous flexibility is offered for sale.”
Dairy NZ and Assure Quality are the two biggest tenants. Dairy NZ is on a monthly term after signing for an initial three years in 2015, with three three-year rights of renewal and is paying annual rent of $44,669, while Assure Quality also signed its initial lease in 2015 and has three three-year rights of renewal and is paying $37,530 in yearly rent.
The property has good access to State Highway 26 and the area connects well with existing commercial uses and is separated from residential areas.