The effects of COVID-19 have been many and varied for different sectors. In our case, the agreements for the properties we had hoped to purchase at Tidal Road included sunset dates as part of their market standard conditions. Delays caused by the COVID-19 pandemic and associated New Zealand Government enforced lockdowns saw those dates reached and the agreements cancelled late in 2020. But around the same time, we added to our presence on Rosebank Road, by agreeing to purchase properties adjoining those we already own for $39 million, settling the purchase after year end on 29 January 2021.
Our purchase of the 2.8 hectare site in Avondale includes four buildings leased to two tenants, NZ Comfort Group and Dunlop Flooring. Combined with the adjacent properties we already own on Rosebank Rd and Patiki Rd, the purchase creates an industrial property precinct of 8.6 hectares valued at more than $110 million and just 250 metres from the North-Western motorway.
“The new acquisition aligns with our strategy and presents a unique opportunity to increase returns and value in the long term by integrating the property with our existing holdings,” says Chief Executive Simon Woodhams. “In the short to medium term, we look forward to generating stable income from two excellent tenants. At the same time, we recognise that the opportunity to create a substantial industrial estate in a central industrial precinct zoned Heavy Industrial is extremely rare.”
The properties are currently fully leased for $1.7 million annual rent, with a weighted average lease term of over four years.
“The acquisition of the properties at 670-680 Rosebank Road in Avondale enables us to increase our footprint in a neighbourhood we believe will deliver increasing returns and value in the long term,” says Woodhams. “The location of the site, so close to the North-Western motorway, aligns with emerging needs in logistics and trends in e-commerce. We look forward to exploring how we can maximise the returns for investors over the medium term through redevelopment of some of the site, as well as potentially strategic leasing opportunities.”
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