Given food grade premises are highly sought-after by occupiers, investors can take confidence in the underlying credentials of a functional and well-located industrial unit on Christchurch’s city fringe.

Used as the production hub for innovative business Grizzly Baked Goods, Unit 4, 21 Aldwins Road in Phillipstown is a single-level unit-titled building forming part of a 15-unit complex built in the 1970s, with nine of these being self-storage units.

Unit 4 has an established leasing history as a bakery facility and offers circa-701sqm floor area including a useful canopy and provides 361sqm food production space, a 197sqm warehouse, 96sqm office and amenities, chiller space and nine onsite car parks. The vendor advises the property has been strengthened to 80-percent NBS.

Grizzly Bagel Limited, trading as Grizzly Baked Goods is on a five-year, five-month term that commenced 1st October 2022, with the lease having a further two, five-year rights of renewal. The property has a current net annual income of $86,000 plus GST and outgoings.

Phillipstown is around 2km south-east of the CBD, with commercial and light industrial properties tending to be located on the western side of this largely residential suburb. The subject site is zoned Industrial General and is well-positioned on a major arterial road giving streamlined access in and out of Christchurch.

Graeme Donaldson and Steven Schwalger of Bayleys Christchurch are taking the property to auction on Thursday 3rd July, unless sold prior.

The entrepreneurial business Grizzly Baked Goods started production in Sydenham and expanded its production arm into this site in 2022 to provide breads, pastries, bagels and other baked goods for Grizzly retail storefronts in Buchan, Welles and Cashel Streets, along with supplying local eateries.

Donaldson says the property represents a solid-performing, hands-off investment opportunity in one of Christchurch's most accessible industrial locations.

“Phillipstown allows operators to be close to the city centre without paying prime rents so there’s minimal vacancy and not much comes up for sale, either.

“To replace this food production asset at today’s costs would be prohibitive which makes it all the more valuable to an investor and gives a point of difference in the leasing market.

“As a growing brand with strong local loyalty and consistent demand, the property is well-suited to tenant Grizzly Baked Goods’ operating model as it has stores and trade customers spread around the city so having strong arterial access is crucial.”

Inventory of available tenanted investment stock is constrained in Christchurch, with Donaldson saying investors are highly motivated in the current environment.

“Diminishing returns for money in the bank is putting eyes back on commercial and industrial property. Lenders want to see reliable income streams, so leases with sound tenant covenant, rental growth mechanisms and in-demand fundamentals – such as this one – hit the mark.

“Also underpinning the appeal of a food production-related asset is the fact that consumers are increasingly wanting to buy local and support businesses close to home, which supports future occupier demand.”