Subdued outlook forecast for industrial real estate

A more subdued outlook next year has been forecast by listed industrial real estate specialist Property For Industry but it will still have opportunities to develop properties worth $20 million to $40 million.

General manager Ross Blackmore told the annual meeting in Auckland yesterday that the company was in good shape to cope with a less robust economy next year.

PFI shareholders also voted on 27 changes to the company's constitution and approved all the alterations to meet NZX listing requirements.

Blackmore said PFI charged one of the lowest fees in the listed property sector last year, at 0.89 per cent of the value of assets - the same as ING Property Trust.

The highest fee was Macquarie Goodman Property Trust's 2.03 per cent, followed by National Property Trust at 1.98 per cent.

PFI planned to buy more properties in the coming year, particularly where it could add value with leasing and development skills. The company has 54 properties valued at $333.4 million.

During the past two years, the company completed developments worth $19.2 million. In the pipeline are a further $24 million to be finished within the next three years and a further $22 million which could be undertaken in the next six years.

Last year, the company leased eight buildings and 23,000sq m. It conducted 23 rent reviews, adding more than $1 million to its rent roll, making last year its best rental review year so far.

Most of the eight major tenants whose leases expire this year were retained. Fletcher Steel's lease on a building at 44 Mandevill St in Christchurch rose from $413,668 to $493,000 a year and Ideal Electrical's lease rose from $68,845 to $80,000.

Not all rents went up. John Sands was leasing an Avondale building at $133,000 which was reduced to $99,000.