$70m PFI deal reveals buoyant industrial sector
The sale of a nationwide property portfolio to listed industrial property landlord Property For Industry (PFI) illustrates the continuing demand for quality industrial assets, according to the agent who brokered the deal.
Ben Dwan, who is an industrial broker in Savills’ Christchurch office, negotiated the sale of nine buildings on behalf of TIL Properties and associated interests for $69.5 million, representing a passing yield of 7.22 per cent.
The deal is thought to be the largest in the industrial property market in New Zealand this year.
The property portfolio has a weighted average lease term of 14 years, is 100 per cent occupied and includes a significant amount of rentable yard areas that will provide opportunities for future development.
Long-term tenants including TIL Freight, New Zealand Post, Aviagen and Contact Energy will continue to lease the properties.
‘‘From an investment point of view this was a very attractive property portfolio, so we knew it would be highly sought after for large-scale investors,’’ Dwan said.
‘‘It offered a good spread of locations from Auckland to Christchurch, with long leases in place.
‘‘The large yard areas that will receive rent was also a big drawcard for PFI. This effectively future-proofs the properties, with space to expand current facilities or construct new and bigger buildings if needed.’’
There was still plenty of appetite in the market for long-term industrial holdings, Dwan said.
Investors were gaining confidence to expand their portfolios based on ongoing economic growth and high levels of business confidence in New Zealand, he said.
‘‘Industrial property has been a really popular investment sector for several years now, with lots of businesses doing really well and the macro environment expected to remain favourable for business growth.
‘‘We’re seeing continued interest from across the buyer market,
from individual buyers looking for smaller warehouses right through to institutional players buying entire property portfolios.’’