59-61 Industrial Place Information Memorandum by Colliers Otago

Colliers have been appointed exclusively to offer for sale 59-61 Industrial Place, Queenstown.

This property is being offered For Sale by Deadline Private Treaty closing on Thursday 12 December 2024 at 4pm (unless sold prior).

This information Memorandum provides preliminary information to assist interested parties with their assessment of the property. Further information is available via an online data room available on request.

Data room documents available:

• Information Memorandum

• Record of Title

• Lease Documentation

• Land Information Memorandum

• Sale and Purchase Agreement

• Market Rent Valuation Certificate

• Plans and Consent Information

All enquiries, requests for information and arrangements to undertake inspections in relation to this opportunity are to be directed to the sole agents.

James Valentine +64 21 777 772 james.valentine@colliers.com

Tim Thomas +64 22 5433 210 tim.thomas@colliers.com

Executive Summary

The Opportunity

Address

Description

59-61 Industrial Place presents an opportunity for astute investors to purchase a passive, bottom-drawer investment with good future upside. The rent has just been reviewed to a market level, with future growth forecast for this area. The property consists of two buildings, with one tenant across both, however, could lend itself to a split-tenancy configuration at some point in the future.

59-61 Industrial Place, Frankton, Queenstown, 9300

A functional industrial building, initially designed for two tenancies, with a mezzanine office area, and generous on-site parking.

Tenure Freehold

Legal Description Lot 23 DP 16439 & Lot 1 DP 17529

Certificate of Title

Land Area

Floor Area

OT7B/1294 & OT8C/1314

955m² (more or less)

703.9m² (more or less)

Zoning Business Zone

Tenancy Whole building leased to Queenstown Panelbeaters (2006) Limited

Net Rental

Sale Process

$120,000 + OPEX & GST p.a. from 1 January 2025

For Sale by Deadline Private Treaty closing on Thursday, 12 December 2024 at 4pm (unless sold prior)

Investment Highlights

RETURNING A NET RENTAL OF $120K + GST

Returning a net rental income of $120K per annum from 1 January 2025, this property presents an excellent opportunity for investors seeking reliable cash flow and long term capital growth

PASSIVE INVESTMENT

The fully tenanted nature of the property means that investors are able to passively collect the net rental

FLEXIBLE CONFIGURATION

While the property is currently configured as one tenant across two buildings, there is potential to split the buildings into two separate tenancies in the future, thus creating a split-risk asset

TIGHTLY HELD AREA

Industrial property on Industrial Place is tightly held, and in scarce supply

With a recent market rent review completed, Investors do not have to wait to access market rent NEWLY ESTABLISHED MARKET RENT

INDUSTRIAL NATURE

Industrial property has proven to be an incredibly attractive asset class, with its low maintenance and strong tenant demand making it appealing to investors

Location indicative only

Located within Queenstown’s original and established industrial precinct off Gorge Rd. The property is positioned at the end of Industrial Place. Queenstown’s CBD is located approximately 1.5km south of the property.

Queenstown Industrial is an established light industrial area catering for a mix of showroom, trade and light service industrial premises. Buildings in this area were predominantly built in the late 1970’s and early 1980’s with a number having been refurbished or upgraded. There are also some newer buildings particularly in the nearby Repco Boulevard.

Queenstown Lakes Operative District Plan

Effective Date: 29/05/2024

Zoning

Location and boundary indicative only

The property lies within the Business Zone of Queenstown as defined by the Queenstown Lakes District Council District .

Page 1 of 4 Print Date: 18/10/2024 districtplan.qldc.govt.nz

The Zone seeks to ensure a range of site sizes are available, including for those Industrial and Service activities which require larger buildings and more space for the purpose of outdoor storage, manoeuvring of vehicles including heavy vehicles. Ancillary Office, Retail and Commercial activities are important in supporting Industrial and Service activities and are enabled. Activities and development that would not primarily result in sites being used for Industrial and Service activities are avoided. This includes new Office, Retail and Commercial activities.

Please note: It is the responsibility of interested parties to qualify and elaborate all relevant planning information noted above.

Queenstown Industrial Market

Construction, tourism, and a growing regional population continue to drive business growth and confidence among industrial and commercial property occupiers in Queenstown. Currently, the industrial sector has a record-low vacancy rate, with a critical shortage of land for development, limiting the market’s ability to expand and meet increasing demand. This shortage, coupled with high construction costs, is driving rental growth in the sector.

Industrial yields in Queenstown typically range from 5% to 6%, with the lower end applying to newer developments in Frankton Flats and the higher end to properties in the Industrial Place and Gorge Road areas. Over the past 12 months, rising interest rates—spurred by the Reserve Bank’s efforts to curb inflation—have significantly impacted the commercial lending market. Nationally, industrial yields have risen by 1% to 2% as a result.

However, interest rates are now trending downward, with the Reserve Bank cutting rates by 0.25% and 0.50% in its last two reviews and national market sentiment is improving. Many economists, along with the Reserve Bank, predict further cuts in the coming months. On the back of this, we foresee property becoming a more appealing asset class early next year, as investors re-enter the market in response to declining returns from term deposits.

While Queenstown hasn’t been immune to these economic shifts, the market has remained resilient due to strong rental demand, limited supply, and continued interest from cash buyers.

Looking ahead, the expected easing of interest rates over the next 12 months should positively influence the market, and we remain confident that property investments will become increasingly attractive as conditions stabilize.

The Building

Premises Breakdown

Workshop/Offices 524.3m²

Mezzanine Floor 77.7m²

Basement 60.3m²

Covered Entry 41.6m²

59 Industrial Place is a circa 1980s constructed single-level Industrial building of some 260m² located on a 457m² site.

61 Industrial Place also appears to have been constructed in the 1980s and is approximately 280m² on a 497m² site.

Boundary lines are indicative only

Lease Summary

Remaining Renewal Terms

One right of renewal for a further term of 10 (ten) years

Current Annual Rent

Market Reviews

$120,000 plus outgoings and GST from 1 January 2025 Every second anniversary of the commencement date

Record of Title

59 Industrial Place

Deadline Private Treaty Sales Process

A deadline sale is the process of purchasing real estate through confidential submitted written offers. If you want to buy a property by deadline sale, you prepare your best offer and send it to the vendor’s Agent to consider alongside any other offers the vendor receives at any point in the deadline sale campaign.

The property is offered for sale with no price, with a deadline by which offers need to be submitted on the basis that the vendors reserve the right to accept an offer at anytime before the deadline sale closes.

Buying by deadline sale is a relatively simple process, with advantages for the purchaser as well as for the vendor. However, it’s not simply a matter of turning up on the day and writing down what you’d like to pay. It’s worth doing full due diligence early to know your rights and obligations and to ensure you feel comfortable with the process .

To help you better understand how deadline sales work, we’ve put together a list of key things you’ll need to do before submitting an offer.

• Arrange finance. This is very important. You need to be comfortable with the level at which you’re offering. It’s fine to put a finance clause into the contract, but bear in mind that a vendor may favour the most straightforward offer on the d ay.

• Read the contract. The ‘Sale and purchase agreement’ is the contract signed by the potential purchaser at the time of submitting a deadline sale offer. If your offer is accepted, it will then be signed by the vendor and become a binding contract. It contains a legal description of the property and terms of settlement. We recommend you engage legal advice before presenting an offer.

• Know the value. If you have been studying the market, you may have a good idea of what the property is worth. If you need help, your real estate Sales Consultant can refer you to similar properties which have sold recently that are a good comparison. Otherwise you could arrange for an independent valuation.

How to make an offer:

• Know the process. Talk to your Colliers Agent about exactly what will happen on and before the deadline sale closing day.

• Talk to your Colliers Agent when formulating your offer. They can assist you in looking at comparable sales and provide information enabling you to make an offer you’re comfortable is the current market value.

• Consider your conditions carefully. Where possible it’s best to minimise the conditions on a deadline sale offer, however it’s also advisable to not spend a large amount in advance when there is a chance your offer may not be selected. B alance is the key.

Offers to be submitted to Colliers Sole Agents by 4pm, Thursday 12 December 2024.

Due Diligence

To assist in the assessment of this offering, comprehensive due diligence information is available via a secure documents link. For access to all documents please register your interest with one of the agents.