Huge former Todd Motor complex for syndication

Aerial view of huge 52,180 sq m former Todd Motor Group complex at 15 John Seddon Drive, Porirua.

Albany based Maat Consulting Group has launched a new syndication anticipating a return to investors of 9.25 per cent annually and based on the purchase of a large former Todd Motor Group complex in Porirua north of Wellington.

The main building was opened in 1973 and was used as an assembly plant for Mitsubishi Motors NZ Ltduntil the plant was closed in the late 1990s. Mitsubishi Motors New Zealand Limited now has its national parts distribution centre in Todd Park and has its New Zealand head office located nearby. Other tenants occupying the property include Fletcher Distribution Ltd (Placemakers), New Zealand Post Ltd, Wellington Electricity Lines Ltd, Downer New Zealand Ltd, R. Hannah & Co Ltd (Hannahs), Ericsson Communications Ltd, Anderson & Flowers Ltd, Conroy removals Ltd, Fusion Interiors Ltd and He Whanua Manaaki O Tararua Free Kindergarten Association Inc.

Having a street address of 15 John Seddon Drive, the total building area of 52,180 sq m occupies a huge freehold site of 8.4515 hectares vested in three lots that are bounded by Lyttelton Ave, Heriot Drive and John Seddon Drive.

Brian Caldwell of Bayleys.

Brian Caldwell of Bayleys North Shore Commercial who is marketing the syndication says purchasers are being offered 400 parcels of fully paid B shares with each parcel comprising 50,000 shares at an issue price of $1 each. Maat currently holds 100 A shares in Todd Park Investments Ltd - the company established specifically for the syndication to enable Maat to contract for the purchase of the property prior to raising investor capital.

Caldwell says it is intended that the offer will close at 4 pm on September 21 but the company retains the right to close the offer prior to this date if sufficient subscriptions are received or to extend the deadline for up to six months.

"Maat agreed to conditionally buy the property from Rockport Holdings Limited Partnership subject to its capital raising being successful," he says. "A minimum of $15 million will need to be raised initially under this offer in order to complete the purchase of the property. If this is not raised, the company will cancel the offer and application monies will be returned to applicants. It is intended the offer will close at 4 pm on September 21. However, the company may close the offer prior to this date if sufficient subscriptions are received or it may extend the offer past this date."

Street level view of big complex for syndication at 15 John Seddon Drive, Porirua.

Caldwell says the property was valued at $36.5 million in a report prepared by Jones Lang La Salle in July this year including factoring in a needed roof replacement.

The purchase price is $33 million and the roof replacement cost is estimated at $3 million resulting in a total initial capital outlay by Maat of $36 million. Following the successful raising of $15 million via the syndication offer, the balance of the purchase price will be met via ASB bank financing, with a further $5 million of capital to be raised by January 21, 2016, to reduce the bank borrowing to 47.5 per cent. The property is zero rated on the purchase so no additional amount is payable for GST.

Caldwell says that Maat will be responsible for the management of Todd Park Investments Ltd including the payment of monthly income distributions to shareholders, maintaining proper accounting records and issuing timely reports to investors.

"The directors of Maat have considerable experience in commercial property proportionate ownership management, business strategy, property finance and governance," Caldwell says. "Following its syndications during the past five years, Maat currently manages nine commercial properties with a combined value of $113 million on behalf of its investors in Auckland, Whangarei, Whakatane and Petone.

"Around 45 per cent of the purchase price of these properties has been funded by bank loans with the balance met by investor subscriptions," Caldwell says.