Industrial investment opportunity, Gisborne

The former Gilmours building in Awapuni Road, Gisborne is up for tender with Bayleys as the property becomes surplus to the owner’s requirements following the recent closure of the well-known business.

The property at 53 Awapuni Road in the Awapuni industrial precinct is owned by Foodstuffs (Auckland) Ltd. Gilmours was formerly the wholesaling arm of Foodstuffs but in recent times Foodstuffs has franchised its Gilmours’ branches in line with the franchise business model they apply to their other ‘brands’ – New World, Pak ‘N’ Save and Four Square. The Gisborne branch of Gilmours however, was closed earlier this year and Foodstuffs no longer requires the building.

With the announced sale of the property comes the superb opportunity for an investor to secure an industrial warehouse in good condition on 5794sq m of land with location on its side.

Newly-listed and marketed by Colin McNab of Bayleys Gisborne and Paul Dixon of Bayleys Auckland, the property is already attracting good enquiry as savvy investors recognise the value inherent in such a well-located, large warehouse.
“Being on State Highway 35 and just minutes from the CBD, the port and Waikanae beach, the boxes are all ticked in terms of location. There is very little industrial property currently available for sale so close to town – in fact, this sort of opportunity rarely comes up at any time,” says Mr McNab.
“Switched on investors and owner-operators know a good proposition when they see one and with the squeeze on centrally-located industrial property, this one is standing out.”

The building is well-known by Gisborne people, as Gilmours was the place where hospitality and dairy operators - along with the region’s school, sporting and marae groups - went to buy wholesale food and liquor supplies.

“The facade of the building dates back to the 1930-1940s when it was constructed as a wool-store for Williams and Kettle Limited. This facade was retained when the retail warehouse was developed sometime in the late 1950s or early 1960s and subsequent upgrades have given a contemporary, streamlined look to the exterior,” says Mr McNab.

The functional 3913 sq m building – including canopied loading dock and customer entrance canopy – is partitioned to provide three main areas; a central retail space, a rear inward-goods warehouse and a front warehouse. There are also partitioned offices, storage areas and staff amenities.

“The building is positioned to the western boundary and runs the full length of the site. Alongside is a generous 1450sq m of sealed car parking and access yard which opens up the future development possiblilities. If the warehouse was internally subdivided, each tenancy could have its own yard space and access,’ says Mr McNab.

“The building would be particularly suitable as a storage facility and could easily be divided up and sub-let should a new owner wish to go down that path.”

Awapuni is Gisborne’s main industrial precinct and neighbouring properties comprise light industrial businesses, manufacturing facilities, warehouse/storage operations and some bulk retailing.

Throughout the recent national economic downturn, industrial property has proved to be fairly resilient and generally fared better than retail and office assets, with yields not softening to the same degree.

“In Gisborne - as with other provincial centres – there has been very limited new industrial construction going on which has meant that demand has remained reasonably steady for existing industrial stock. On the back of an improving domestic economy and increased consumer spending, we would expect to see the fundamentals for manufacture, storage and distribution of goods coming back into line and this property is well-positioned to be part of that next wave,” says Mr McNab.

“Enquiry levels in Gisborne for commercial and industrial property thus far in 2010 have shown us that there are certainly investors and owner-occupiers in the market with good equity and an eye for a solid investment.

“Someone with vision will recognise that this building has a number of possible end uses and will apply some lateral thinking and sound business logic to come up with a workable option.”

Mr McNab believes the buyer of this property will have a long-term investment strategy in mind and well-founded confidence in Gisborne’s future.

“Good quality industrial property in a sound location has an inherent value. The proximity to the port, the CBD and the main arterial highway that this property boasts all work in its favour as does the future redevelopment potential of the site.”

Tenders on the property close with Bayleys Auckland on 20 May, 2010.