ING Property Trust announces new joint venture
Auckland • Tuesday 11 July 2006
ING Property Trust announces new joint venture agreement
The Manager of listed property vehicle ING Property Trust announced today it has unconditionally agreed to purchase a 50% interest in the share capital of North East Industrial Limited (“NEIL”), the owner of 70 hectares of industrial and commercial-zoned land in Palmerston North, currently known as the North East Industrial Park (“the Park”).
Managing Director of ING Property Trust Management Limited, Andrew Evans, says the joint venture will provide the Trust with significant benefits, opportunities and growth.
“This is a substantial site with huge potential. The fact that the land is already zoned and available for immediate further development gives the Trust a pipeline of value-added opportunities.”
Mr Evans said the Park’s proximity to the airport, railway and city centre makes it ideally placed for a range of commercial and industrial occupiers, and the zoning provides for tenants to operate “essentially unrestricted on a ‘24/7’ basis“.
NEIL has already attracted Ezibuy as a key anchor tenant. Ezibuy’s recently completed state-of-the-art distribution centre occupies approximately 27,000 square metres (on a 5.9 hectare site), with an additional 2.5 hectares of expansion land reserved for potential growth.
A multi-purpose recreational facility (including café, mini golf, golf shop and driving range, dive HQ and ten-pin bowling alley) also forms part of the property. In addition, construction has recently commenced on a new head office and warehouse facility for key tenant Allflex, a Palmerston North-based business and one of New Zealand’s leaders in livestock management systems. NEIL is also in discussions with more than 10 prospective tenants regarding future development and occupancy at the Park.
Under the joint venture structure, the Trust is to receive an 8% return on the undeveloped land (currently 44.5 hectares) from the vendors, until new buildings are completed and become income-producing.
“To have been able to guarantee an income while awaiting development is an exceptionally good outcome for the Trust’s unitholders,” said Mr Evans.
“Palmerston North is increasingly recognised as a key distribution hub and strategic location for the lower North Island, with a catchment of some 1,000,000 people within a 2½ hour drive.”