Port sells Fonterra building

A huge warehouse used by Fonterra at Timaru's port has been sold to a North Island investment company.

The 22,000sq m store, on more than 2ha of land, has sold for an undisclosed price.

One of the South Island's largest industrial storage buildings, it will return an initial annual income of $1,110,576 from Fonterra's rent.

Primeport Timaru chief executive Jeremy Boys said settlement of the sale would be completed once titles to the subdivision on which the building was situated had been issued.

The purchaser wished to remain anonymous at this stage.

The property was sold with a 15-year lease back to Primeport Timaru and more rights of renewal.

The port has entered into a long-term sub-lease arrangement with Fonterra which uses the building to store dry milk powder produced at the world's second-largest dairy factory, at Clandeboye, near Timaru.

Bayleys' Bob Davison, who sold the property, said the warehouse attracted great interest from investors around New Zealand and internationally.

"There is real demand at the moment for quality investment property."

Boys said the building had been developed by Primeport to accommodate Fonterra's storage requirements for the next decade and beyond and expand the shipping of dairy products.

Proceeds from the sale would be reinvested into the port's infrastructure.

- NZPA