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News Release

New Zealand

Trio of options arises from Goodman deal

NZ Herald Article - May 2010



Long term investment with development potential/new-zealand/en-gb/news/916/long-term-investment-with-development-potentialAUCKLANDLong term investment with development potential
Former Fire Station on high profile corner site/new-zealand/en-gb/news/915/former-fire-station-on-high-profile-corner-siteCHRISTCHURCHFormer Fire Station on high profile corner site

Three strategically located premises in Dunedin, Nelson and Palmerston North are being sold under a sale and leaseback arrangement on behalf of Goodman Fielder through Nick Hargreaves and Steve Rodgers of Jones Lang LaSalle.

"Goodman Fielder has adopted the Auckland District Law Society lease agreement and will offer a beneficial term of 12 years with rights of renewal of two more six-year leases," says Hargreaves who is seeking expressions of interest on the properties until May 14 for the Goodman portfolio.

The Dunedin property located on the outskirts of the city is in a mixed industrial precinct and comprises a modernised bakery of about 5123sq m on a 3.47ha site.

Fronting Kiakorai Valley Rd, the bakery benefits from immediate access to arterial roads north and south of Dunedin for easy distribution.

"Contract rental will return an investor $290.88 per annum," Hargreaves says.

The Nelson property is also a bakery occupying a 2250sq m area on a 6663sq m site at 101 Bolt Rd, Tahunanui.

Rodgers says the bakery is well-positioned in an established industrial precinct with current annual contract rent of $208,250.

In Palmerston North the third property in the Goodman portfolio is a large factory warehouse of 11,300sq m with an extensive canopy. It is on freehold site of 2.8ha and returns $890,000 per annum. Rodgers says the property represents one of the larger single property holdings in Palmerston North and benefits from drive-through access to Botanical Rd and Highbury Ave.

Hargreaves says another Goodman property in the portfolio has already been sold providing evidence that investor activity is rising for the right product. "This Goodman Fielder sale and leaseback property at 20-24 Toop Street in Seaview, Wellington, sold within weeks of the campaign started for over $6 million, representing an 8 per cent yield," Hargreaves says.

"The 4743sq m of warehouse and office space with current annual market rent of $503,560 attracted significant interest from local and overseas investors. The purchaser was an on-shore private buyer who was drawn to the investment due to the security of the cash flow provided by a quality tenant on a long-term lease."

Nick Hargreaves says that despite the slow down in general market activity since the global financial crisis, there is a growing stream of investors emerging for the right type of product.

"It's back to basics for a lot of investors and when they see a good opportunity with strong value they are quick to act."

Goodman Fielder is Australasia's leading listed food company which has been part of daily life for over a century. Generations of Australians and New Zealanders have grown up with Goodman Fielder brands in their pantries and kitchens including the iconic Edmonds Baking Powder which has been synonymous with baking in New Zealand for 125 years.

Chris Dibble, head of research at Jones Lang LaSalle, says sale and leaseback campaigns have been increasing over the last two years as businesses look to create flexibility in their operations.

"The current economic position provides leading firms the opportunity to structure terms that meet a diverse range of financial and operational objectives," Dibble says.

"Goodman Fielder is a dream tenant who understands its core responsibilities and is streamlining its business to unlock the balance sheet and provide an enviable sale and leaseback opportunity for investors."

Hargreaves says the freehold industrial premises for sale are complemented with small office components and are located in prime spots within regional main industrial precincts.

"Having a globally astute tenant renting these properties which are in good locations and on strong lease terms, is proving to be a big drawcard for investors who are looking for solid cash flow," he says.

Hargreaves says the premises are well known by local investors and will also appeal to offshore buyers and syndicates.