6 Bush Creek Road | Arrowtown Information Memorandum For Sale by Deadline Private Treaty closing 14 March 2024 at 4pm (unless sold prior)
Accelerating success.
Introduction Colliers have been appointed exclusively to market for sale 6 Bush Creek Road, Arrowtown.
This property is being offered For Sale by Deadline Private Treaty closing Thursday 14 March 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 and Interests • Lease Documentation • Land Information Memorandum • Building Plans and Specifications • Draft Sale & Purchase Agreement All enquiries, requests for information and arrangements to undertake inspections in relation to this opportunity are to be directed to the sole agents.
colliersotago.co.nz/67027309 Data room link: propertyfiles.co.nz/ property/6BushCreekRoad Mary-Jo Hudson +64 21 667 880 maryjo.hudson@colliers.com Rory O’Donnell +64 27 445 3982 rory.odonnell@colliers.com
Contents
Executive Summary
2
Investment Highlights
4
Location
6
Zoning
7
Market Overview
8
The Buildings
10
Lease Summary
12
Certificate of Title
14
Photos
16
Sales Process
18
Due Diligence
19
6 BUSH CREEK ROAD, ARROWTOWN
Executive Summary 6 Bush Creek Road, Arrowtown DESCRIPTION
The property comprises a freehold, fully developed rear site of 997m², including driveway access off Bush Creek Road, located in the small, tightly held industrial precinct of Arrowtown. Whilst a rear site, there is some visibility of the property from Bush Creek Road. Development of the site includes two separate industrial buildings, plus a concrete sealed yard and loose metal access way connecting to Bush Creek Road. Available parking for 6-8 vehicles. The smaller building has been improved to food grade standard including commercial kitchen and packing area. The larger building comprises two separate insulated medium stud warehouse units plus two level custodial flat which is utilized for office use by current tenant.
TENURE
Freehold
LEGAL DESCRIPTION
Lot 2, DP 25704
CERTIFICATE OF TITLE
OT17D/296
LAND AREA
997m² (more or less)
NET LETTABLE AREA
392m² (approximately)
LOCAL AUTHORITY
Queenstown Lakes District Council (QLDC)
ZONING
Industrial A (Operative District Plan) General Industrial & Service (Proposed District Plan)
RATEABLE VALUE (as at 1 Sep 2021)
Capital Value - $1,900,000 Land Value - $1,000,000 Improvements Value - $900,000
OCCUPANCY
Fully Leased to Remarkable Sweet Shop Limited
CONTRACT RENT
$98,670 p.a plus OPEX & GST
2
6 BUSH CREEK ROAD, ARROWTOWN
location indicative only
location indicative only Boundary lines indicative only location indicative only
3
Investment Highlights Fully Leased Fully leased to Remarkable Sweet Shop Limited, an established local business
Rental Upside
Freehold Title
Rental upside for incoming purchaser
Land area of 997m² (more or less)
Tightly Held Market
Flexible Buildings
The property is located in Arrowtown’s tightly held industrial precinct
Configuration of buildings enables multiple tenants in the future
4
location indicative only
Location The property is situated on the northeast side of Bush Creek Road within the small, tightly held Arrowtown Industrial Precinct. Bush Creek Road is a ‘no exit’ roadway extending from Manse Road through to the boundary of the extensive reserve area at the north end. Manse Road extends off Malaghans Road in front of Millbrook Resort, continuing through to the historic residential precinct on the western periphery of the Arrowtown commercial centre. Surrounding development on Bush Creek Road includes predominantly light industrial development including two extensive, underdeveloped, yard storage areas including one immediately next to the subject property on the north side; and a further larger area on the north western side of Bush Creek Rd at the far end, bordering the reserve land. Both these extensive yard areas enable further subdivision and development in the future. Directly opposite the subject property, on the western side of Bush Creek Road, is the Arrowtown self-storage facility. The lot directly in front of the subject property has been developed with 4 small single level unit title industrial units. Outside of the reserve land, the broader area around Bush Creek industrial area comprises residential development.
6
Zoning Under the Operative District Plan (OPD), the property is zoned Industrial A. Under the Proposed District Plan (PDP), the subject property is zoned General Industrial and Service. These same zones apply for the southern end of Bush Creek Road as well; the combined area forming the Arrowtown Industrial Precinct. This small industrial ‘pocket’ is positioned between the extensive Rural General Zone at the north end of Bush Creek Road; and the Meadow Park zone to the south west. Meadow Park is an extensive medium density residential zone running through to Malaghans Road, opposite Millbrook Resort. The Industrial A zone caters for a range of light industrial uses. Site coverage permitted is 75%. The proposed General Industrial and Service Zone provides a similar range of Industrial and Service uses as the Industrial A Zone. A number of existing Office, Retail and Commercial activities were established within the zone under the previous District Plan framework. The zone seeks to recognise these activities by permitting them, and to provide them to change overtime through the resource consent process. Any changes to these activities are likely to be limited in nature and scale so as to support the overall intent of the zone to provide for Industrial and Service activities.
7
Market Overview Construction and Tourism continues to underpin business growth and confidence for occupiers of industrial and commercial property. There is a critical shortage of land available for industrial development and strong demand for industrial space in the market. Currently industrial property has the lowest vacancy rate on record. Shortage of industrial property for lease, and the high cost of construction of new buildings, is resulting in rising rents. Increases in land values expected to continue due to lack of supply. Queenstown Industrial yields in the wider Queenstown area (including Arrowtown), from 2018 through Covid into 2022, generally ranged between 4% – 5.0%. Over the last 12 months the market has had to absorb a significant rise in interest rates as the Reserve Bank responds to inflation. Queenstown, whilst not totally immune, has remained relatively resilient compared to other parts of New Zealand, however we are now seeing yields starting to push out by around 0.5% above previous levels. The viability of new commercial and industrial properties is being challenged by increasing development costs, however long term the ongoing population and tourism growth projections will result in continued demand for commercial and industrial space that will put pressure on rents to rise. The Arrowtown Industrial market is very tightly held with few transactions in any one year. There is typically strong demand given the very limited supply of property in this sought after area.
The Buildings 6 Bush Creek Road The property is largely fully developed accommodating two separate industrial buildings and hard seal concrete yard on a level rear site of 997m² on Bush Creek Road, Arrowtown. The property has no road frontage but the buildings are visible from Bush Creek Road. General Construction is summarised as follows: Foundations & Floor Slab: Reinforced concrete External Walls:
Colorsteel
Roof:
Colorsteel
Window joinery:
Aluminium
Office flooring Upstairs:
Timber
Internal Linings (Units 1-3):
Plaster board walls and ceiling within the office unit. Within the two warehouse storage units include plasterboard lining to amenities and exposed wall and ceiling insulation. Fully lined to NP3 Certified food grade standard including suspended ceiling, painted plasterboard walls, washable wall linings and linoleum flooring.
Internal Linings (Unit 4):
The layout of the site comprises a larger freestanding mixed-use building along the East Boundary divided into three units (Units 1-3) ; together with a smaller standalone fourth unit along the West Boundary that has been developed to food grade standard (Unit 4). Configuration of the mixed-use building includes two separate warehouse storage units (Units 1 & 2) with pitched roof design, roller door access and separate entrance door. Each warehouse unit is provided with water, waste, sewage, and electrical meter box connection. The individual storage units are both insulated for temperature control with each provided with a separate heat pump unit for heating & cooling. The remaining unit within
10
the Mixed-Use building (Unit 3) was originally developed as a Custodian Flat for residential use but has been converted to use as an office by the current tenant. The layout comprises ground floor office with separate staff area including kitchen plus separate bathroom/laundry facility; while upstairs there are two separate office areas each with built in storage cupboards. The north facing upstairs office has a small deck on the north side of timber construction. Unit 4 is certified NP3 food preparation and distribution standard. The layout comprises entrance foyer, separate toilet, full commercial kitchen, and separate food grade packing area. The commercial kitchen and distribution area are provided with various built in stainless steel benchtops. Within the commercial kitchen there is an extensive extractor hood unit including roof top ducting with both air in/out motors. The buildings were originally constructed circa 2001 with the alteration to Unit 4 to food grade standard completed circa 2017. Plans and specifications are available in the secure data room for the property. Premises Breakdown Office Residential (Ground)
65m²
Office Residential (Upstairs)
54m²
Warehouse Storage Unit 1
99.50m²
Warehouse Storage Unit 2
99.50m²
Food grade Unit (Unit 4)
83m²
Total Floor Area
401m² (net lettable area 392m²)*
* Net Lettable Area assessed at 392m²after allowance for the low stud areas upstairs (i.e <1.5m stud).
(Floor areas are approximate and subject to measure)
The balance of improvements on site include concrete hard seal yard area between the buildings; and loose metal driveway connecting to Bush Creek Road. Vehicle parking is not marked out however there is capacity for 6-8 vehicles.
11
Lease Summary Address
6 Bush Creek Road
Tenant
Remarkable Sweet Shop Limited
Tenancy Net Lettable Area (sqm)*
392
Current Term
5 years from 1 April 2024
Rights of Renewal
Nil
Rent Reviews
Market Rent Reviews on 1 April 2025 and 1 April 2027
Final Expiry
31 March 2029
Current Passing Rent **
$98,670 p.a effective from 1 April 2023
Comments
The lease dated 7 June 2019 commenced 1 April 2019 for a 5 + 5 year term. Renewal effective 1 April 2024 has been exercised. Copy of lease documentation available in data room.
Note - Passing Rent is the current contract rent for the property per lease. * Approximate Net Lettable Area only. ** Rent excludes OPEX & GST.
12
13
6 BUSH CREEK ROAD, ARROWTOWN
Existing Title 6 Bush Creek Road
14
6 BUSH CREEK ROAD, ARROWTOWN
15
6 BUSH CREEK ROAD, ARROWTOWN
Photos UPSTAIRS OFFICE
GROUND FLOOR OFFICE
16
6 BUSH CREEK ROAD, ARROWTOWN
COMMERCIAL KITCHEN
WAREHOUSE STORAGE
17
6 BUSH CREEK ROAD,ARROWTOWN
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 day.
•
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. Balance is the key.
Offers to be submitted to Colliers Sole Agents by 4pm, Thursday 14 March 2024.
18
6 BUSH CREEK ROAD, ARROWTOWN
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. • • • • • •
Information Memorandum Record of Title and Interests Lease Documentation Land Information Memorandum Building Plans & Specifications Draft Sale & Purchase Agreement
All enquiries, requests for information and arrangements for site inspections are to be directed to the Colliers sole agents:
Mary-Jo Hudson +64 21 667 880 maryjo.hudson@colliers.com
Rory O’Donnell +64 27 445 3982 rory.odonnell@colliers.com
19
Boundary lines indicative only
6 Bush Creek Road Arrowtown FOR SALE BY DEADLINE PRIVATE TREATY Closing 4pm, Thursday 14 March 2024 (unless sold prior) Colliers, Top Floor, 10 Athol Street, Queenstown colliersotago.co.nz/67027309 Mary-Jo Hudson +64 21 667 880 maryjo.hudson@colliers.com
Rory O’Donnell +64 27 445 3982 rory.odonnell@colliers.com
DISCLAIMER: This Information Memorandum has been prepared solely for information purposes in order to assist interested parties in making an initial evaluation of the property and does not constitute advice nor purport to contain all of the information that a prospective purchaser may require. In all cases interested parties must conduct their own investigation and analysis of the property and the data set out in this Information Memorandum to satisfy themselves in all respects and not rely on the information in this Information Memorandum to make their purchasing decision. This Information Memorandum has been prepared in good faith and with due care by Colliers, but neither Colliers nor the Vendor accept responsibility hereunder for the accuracy of any part of the information contained in this Information Memorandum. Therefore the recipient/s of this Information Memorandum to the extent that they rely on the information contained herein do so entirely at their own risk. The Vendor and Colliers NZ Limited (and its brokers) expressly disclaim all liability for representations, express or implied, contained in, or for omissions from, this Information Memorandum or any other written or oral communication given to any prospective purchaser in the course of their evaluation and/or offer. This Information Memorandum does not constitute an offer for sale or purchase or otherwise. Please be aware that Mortgagee Sales can present more risk to purchasers, we recommend you take advice from your lawyer in this respect.