Bulk petrochemical distribution facility to be auctioned

Posted On Wednesday, 01 September 2010 02:00 Published by eProp Commercial Property News
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Generating income from three leases, the underutilized bulk petrochemical distribution facility located in Roodekop, Germiston, goes on auction on September 15.

Property-Housing-ResidentialThe site, 7 Forsdick Road, built for and operated by an International Lubricant Company, is an irreplaceable and unique facility, situated on 5.3219 ha.

The facility comprises a large distribution warehouse of 11,126 m², workshop facilities of 783 m², an office block of 1,449 m², 23 bulk storage tanks – with total storage capacity of 9,011,394 litres as well as ablution and canteen facilities.

The entire property is covered by a sealed concrete yard, which allows for multiple truck access, storage and operation.

Currently the facility is generating income from three leases: A lease with a group company for the offices, workshop and yard, a five year lease with a cross border tobacco and cotton distributor as well as the tanks with a total capacity of 3million litres which are being leased to a national fuel company for lubricants at a rate of R0.36 throughput per month.

Rental is only paid on the actual capacity utilized during the month and the average capacity utilized during the past 6 months is 830,000 litres per month or 28% utilization. Accordingly the Gross Annual Income currently is R7, 725,600.

Even so the facility is not being used to its optimum capacity. Optimum and best use for the facility would be for a user who would make full use of the 9 million litre tank farm. According to Directors market would be prepared to pay 10 -15 cents per litre per month for such bulk storage facilities.

In current condition the tank farm is fully operational and is suited for non-flammable liquids, these include Lubricants, Transformer Oil, Black Oil, Chemicals, Vegetable Oils and other such liquids.
Should the user wish to store flammable liquids such as Diesel, Petrol, Paraffin or similar then the fire fighting facilities (in particular the bunting and high pressure water) would need to be upgraded. This would amount to a capital investment of R1.5 – R2.5 million.

The facility has rail siding which allows for delivery by rail. Coupling facilities would service the current road transport as well as the rail siding.

“The facility is ideal for lubricant distributor, bulk fuel or chemical storage and distribution, staging facility for mines or other re-distribution into Africa, or as logistics hub. According to current owners the tank farm could also accommodate dry bulk, although the delivery mechanism would need to be changed” comments Warren Aronson of Auction Alliance.

The auction takes place on September 15 at 12pm at The Southern Sun Hotel, Grayston Drive, Sandton.

Last modified on Thursday, 12 June 2014 15:58

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