Cavalier Bremworth's Whanganui plant for sale under leaseback arrangement

Cavalier Bremworth's Whanganui plant is for sale for leaseback as part of the company's national property portfolio. Photo / Supplied

Cavalier Bremworth's Whanganui yarn spinning plant is on the market - but it would be sold on a leaseback basis that means the business will keep operating.

And Cavalier Bremworth chief executive Paul Alston says the company is only looking at the potential of selling.

"We may or may not sell, depending on what we get," Alston said.

The plant, which has buildings in Leamington St and Beaumaris Ave, is included in the company's national property portfolio that is on the market as a sale and leaseback offering, along with properties in Napier and South Auckland. They can be sold individually or as a package, with Cavalier Bremworth committing to long-term leases under new ownership.

Cavalier is one of only a few companies worldwide that makes felted wool carpets, using high-quality yarn produced at the Castlecliff plant. It has around 50 staff and processes up to 20,000kg of wool a week.

Cavalier Bremworth chief executive Paul Alston. Photo / File

Alston said the Whanganui and Napier plants were "integral for our plans going forward" and he expected growth in the next few years.

"We're planning to be there for the long term," Alston said.

"There are no job losses and there are no plans to drop staff. The felted plant that's there is an important part of our operation.

"The Whanganui plant is a real part of our future."

Scott Campbell, national director of industrial and logistics for agent Bayleys, said the plant's land and buildings are freehold.

"The subject site is around 2.4ha in size and has been occupied by Cavalier Spinners – formerly Castlecliff Spinners – since its establishment in the 1970s," Campbell said.

"The main factory has been extended and altered throughout the years and, coupled with other buildings, the total lettable area is around 11,420sq m."

The indicative net rental is $650,000 per year plus GST, with a 10-year lease term from settlement.

In 1975 Cavalier's founders Tony Timpson and Grant Biel, who set up their company in Auckland 50 years ago, decided they needed to diversify into spinning plants because yarn supply was a challenge.

They needed somewhere near natural gas supply and a main trunk railway line in the North Island. They settled on Whanganui and set up Castlecliff Spinners in a joint venture with Alliance, with Cavalier eventually taking over the whole operation.

It was a significant local employer but in 2016 Cavalier announced a restructure, with the bulk of its work moving to Napier and the loss of 108 spinning jobs in Whanganui.

However, when the Christchurch felting plant closed that operation moved to Whanganui, creating 40 different jobs. It meant a total loss of 68 jobs in Whanganui.

The Whanganui plant produces yarn for Cavalier Bremworth carpets. Photo / Bevan Conley

James Valintine, of Bayleys' sale and leaseback specialist project team, said the portfolio – both as a whole and as individual components – "makes for a compelling industrial investment proposition".

"The industrial sector continues to attract strong investor appetite – particularly where there is a trusted tenant covenant," Valintine said.

"Large, well-located industrial property assets with robust underlying zonings and land values, along with potential for land use change in the future, continue to draw inquiry nationwide.

"The industrial sector was firing on all cylinders pre-pandemic and appears to have emerged largely unscathed, with an uptick in the sale and leaseback market as industrial owner-occupiers transition into a new business and economic environment."

Alston said he had no expectations of what interest there might be in the properties.

The portfolio is for sale by deadline private treaty (unless sold prior) closing at 4pm on July 9.