Biggest industrial sale claimed

NZ Herald

20 Oct, 2017 04:00 PM3 mins to read

The property at 15 Artillery Place, Nelson, was one of nine properties sold to Property for Industry. Photo / Supplied

Savills says the sale of a nationwide property portfolio to Property for Industry Ltd (PFI) is thought to be the largest in the industrial property market in New Zealand this year.

Ben Dwan, industrial broker in Savills' Christchurch office, negotiated the sale of nine buildings on behalf of TIL Properties Ltd and associated interests for $69.5m, representing a passing yield of 7.22 per cent. The deal encompassed buildings with a total net lettable area of 38,663sq m, site areas of 154,898sq m and a site coverage of 25 per cent.

The property portfolio has a weighted average lease term of 14 years, is 100 per cent occupied and includes a significant amount of rentable yard areas that will provide opportunities for future development. Long term tenants TIL Freight (occupying seven of the properties), NZ Post and Aviagen will continue to lease the properties.

The nine properties involved in the sale were:

• 63 McLaughlins Rd, Wiri, Auckland - with a lettable area of 7123sq m and a site area • 23,976sq m, site coverage of 29.7 per cent and tenant TIL Freight.
• 39 Edmundson St, Napier - net lettable area of 2449sq m, site area of 12,140sq m, site coverage of 20.2 per cent and tenant TIL Freight.
• 330 Devon St East, New Plymouth - net lettable area 482sq m, site area 1051sq m, site, coverage 45.9 per cent and tenant TIL Freight.
• 2 Smart Rd, New Plymouth - net lettable area 2342sq m, site area 6121sq m, site coverage 38.3 per cent and tenant NZ Post.
• 20 Constance St, New Plymouth - net lettable area 1432sq m, site area 3312sq m, site coverage 43.2 per cent and tenant Aviagen.
• 28 Paraite Rd, New Plymouth - net lettable area 12,521sq m, site area 40,324sq m, site coverage 31.1 per cent and tenant TIL Freight.
• 11 Sheffield St, Blenheim - net lettable area 4823sq m, site area 20,724sq m, site coverage 23.3 per cent, tenant TIL Freight.
• 15 Artillery Place, Nelson: net lettable area 2907sq m, site area 22,343sq m, site coverage 13sq m, tenant TIL Freight; and
• 41 & 55 Foremans Rd, Christchurch - net lettable area 4584sq m, site area 24,907sq m, site coverage 18.4 per cent and tenant TIL Freight.

"This sale demonstrates the continuing demand by investors for quality industrial assets," Dwan says. "From an investment point of view, it was a very attractive property portfolio, offering a good spread of locations from Auckland to Christchurch, with long leases in place. The large yard areas that will receive rent were also a big drawcard for PFI. This effectively future-proofs the properties, with space to expand current facilities or construct new and bigger buildings if needed."

Dwan says there's still plenty of appetite in the market for long term industrial holdings, with investors gaining confidence to expand their portfolios based on ongoing economic growth and high levels of business confidence in New Zealand.

"Industrial property has been a really popular investment sector for several years now, with lots of businesses doing really well and the macro environment is expected to remain favourable for business growth.

"We're seeing continued interest from across the buyer market, from individual buyers looking for smaller warehouses right through to institutional players buying entire property portfolios."