PFI Buys $23.15 Million Mt Wellington Portfolio
PFI Buys $23.15 Million Mt Wellington Portfolio In Year’s Largest Industrial Transaction
Property For Industry has bought a $23.15 million portfolio of 8 properties in the premier Auckland industrial location of Westfield, Mt Wellington.
The acquisition is the largest in PFI’s six-year history and is also believed to be New Zealand’s largest single industrial transaction this year.
The 8 properties were bought from a private vendor at an average yield of 9.68 percent, with an average lease term of 6.3 years. They will initially provide an additional $2.24 million (11.4 percent) in rental revenue.
Chairman Mr Allan Lockie said: “This is an exceptional collection of properties. Since opening of the estate, properties in Westfield have been highly sought-after by investors, but tightly-held by their existing owners, and it is unlikely that we would have been able to accumulate properties of this calibre and location if we had sought to purchase them individually.”
He said an important part of PFI’s investment strategy was a focus on premium, “land-constrained” locations close to arterial transport routes.
“The Westfield location provides a higher standard of amenity than many traditional industrial locations. This is born out by the high calibre of tenants that have chosen to locate in the area.”
Mr Lockie noted a global trend for organisations to co-locate their corporate head office and manufacturing/distribution facilities on a single site and to provide their employees with attractive employment environments. This has lead to the emergence of demand for high quality space in estates such as Westfield, Pacific Rise and North Harbour. “Within the industrial sector we are seeing emergence of a new building type, often referred to as high-tech or business space. This acquisition provides PFI with an investment in this high quality sub-sector.”
PFI will fund the purchase through existing debt arrangements and the sale of non-core properties, which Mr Lockie said was the most efficient means to ensure optimum returns to shareholders.
Following the acquisition of the eight properties PFI’s debt level will be at approximately 35% of property assets, which is the company’s target debt level.
Prior to planned divestments, PFI’s nation-wide portfolio will comprise 49 properties with a total value of over $215 million.
The properties to be acquired are:
1. 5 Vestey Drive. Leased to PPG Industries NZ Ltd
2. 9 Vestey Drive. Leased to Pegler Beacon NZ Ltd
3. 11 Vestey Drive. Leased to Stocklink Distribution Ltd
4. 15a Vestey Drive. Leased to Ingram Micro NZ Ltd
5. 1 Niall Burgess Road. Leased to Brake & Transmission NZ Ltd
6. 3-5 Niall Burgess Rd. Leased to Email Appliances NZ Ltd
7. 10 Niall Burgess Road. Leased to Taylors Equipment Ltd
8. 523 Mt Wellington Highway. Leased to Steel & Tube Holdings Ltd.
PFI is managed by AMP Henderson Global Investors, the investment management arm of AMP Limited. The management contract includes an innovative management fee structure with a low base fee on assets under management plus an incentive fee based on total shareholder returns above a hurdle rate of 10%. “The management contract is an important feature of an investment in PFI because it links the management fee to total returns of the company. This aligns the interests of management with shareholders, providing a focus on providing the highest possible return to shareholders.”
For further information, contact Allan Lockie on 09-379 7800.
December 8, 2000