Rare chance to buy into landfill operation

An elevated view of part of the C&D Landfill Ltd operation in Happy Valley about four kilometres from the Wellington CBD.

Business assets associated with a cleanfill, construction and demolition landfill venture in Happy Valley south-west of Central Wellington, are being marketed for sale.

"Known as C&D Landfill Limited, the business is located about four kilometres from the Wellington City Centre," says Gerard Dunne, ABC business broker and Wellington branch partner. Dunne is managing the sale of discrete assets associated with landfill business - as distinct from the sale of shares of companies owning assets associated with the business. Dunne says the business assets for sale include rights to operate the landfill site under current resource consents and the rights to operate a future landfill site in a very significant expansion area under consents issued but not yet uplifted.

"Consents have been granted by Wellington City Council and Greater Wellington Regional Council for the expansion area," Dunne says.

Expressions of interest directed to Dunne are sought by September 7 with further guidance on the timing associated with the sale and purchase process to be provided after that.

Located inland from Owhiro Bay, the C&D Landfill site runs from Sinclair Head in the south through Te Kopahau to finish at Kelburn in the north. It is characterised by a series of non-vegetated open-fill terraces, steep banks and haul roads that provide access for vehicles to the fill zones.

The landfill site is gazetted for Sanitary Works and is about 41.5ha in area. It sits within the Carey's Gully Landfill designation and Open Space B of the Wellington City District Plan and includes an area up to the 300m contour line.

Dunne says the Happy Valley site has been used for landfilling of various types of waste since the early 1970s with three landfills operating in the area, along with two closed landfills.

"The C&D Landfill site, covering some 7.7 hectares, will reach capacity in the near future and the owners therefore determined to expand the operation into an area known as the Western Gully, to the north and west of the existing site. The Western Gully expansion site covers some 13.1 hectares and consents were obtained in 2014 to deposit up to 6.3 million cubic metres of cleanfill, construction and demolition fill into this area over an operational timeframe of 35 years.

"The consents enable deposition of 'clean' non-hazardous cleanfill, construction and demolition fill, which typically consists of soil, concrete rubber, steel and general building waste, which is sorted and mixed with soil and site excavations to form 'fill terraces'. The landfill is not open to the general public," says Dunne.

He says the land is leased from Wellington City Council. "The sale of assets would go hand in hand with negotiation of a mutually acceptable lease with the landowner for occupying the site on an ongoing basis", Dunne says. "Interested parties will be required to complete a Purchaser Submission to register as a prospective buyer and demonstrate adequate qualification and resources to operate a modern day cleanfill, construction and demolition landfill site."

Dunne says prospective purchasers may value the opportunity quite differently depending on their situations: "The business owners have chosen to offer no price guidance other than to state their expectation that prospective buyers will recognise the very significant future cash flows that will arise from rights to occupy and operate the landfill. Historic revenue generation from the existing site suggests that gross revenues north of $100 million should be achieved in operating the expansion site over the consented life of the landfill.

"This would be considered a baseline as there is a great deal of development and rebuilding work likely to occur in the greater Wellington region in decades to come. The landfill asset is also highly strategic in the event of the capital suffering a damaging earthquake in years to come".

Dunne says tipping rates in the region are generally lower than elsewhere in the country.

He says the sale of the business assets will be managed as a staged process, commencing with calls for expressions of interest and the provision of comprehensive sales documentation - followed by working through a process of discovery including engagement with Wellington City Council as land owner, and ultimately calling for offers from prospective buyers and negotiation of an Agreement for Sale and Purchase.

"This is a very rare opportunity to take control of a cleanfill, construction and demolition landfill operation in New Zealand," says Dunne. "The landfill is a highly strategic waste management asset positioned to support building and infrastructure development works in the greater Wellington region well into the future."