Provincia Property Fund’s Hunua Road acquisition settled on Tuesday 23 March 2021, becoming the fund’s ninth property.
Interest in Provincia Property Fund is such that the capital raising closed fully subscribed with no need to launch a formal capital raise and no need for an underwriting facility.
The purchase price was $7.8 million, with $1 million deferred until after construction of a new warehouse within the next 12 months, and carries a rental income of $430,000 p.a.
With this acquisition, Provincia’s property portfolio is now valued at $63.7 million and produces a combined rental income of $3.7 million p.a. with an improved WALT (weighted average lease term) of 3.8 years.
Provincia CEO Carl Burling says the Hunua property is a very secure investment thanks to the 10-year triple-net lease we have negotiated with the tenant.
It also ticks the ‘medium-term upside’ box by having a large amount of undeveloped land and a built-in 2% p.a. rental increase with market rent reviews every three years.
Additionally, says Burling, it ticks our risk-mitigation box in that land zoned ‘Heavy Industry’ is in short supply and therefore high demand, giving us peace of mind that we could re-tenant it at any time or develop it to suit a new tenant.
The tenant’s business is classed as an Essential Service, which adds to the security of the investment during Covid-related lockdowns.
Asset manager Jack Revill says the site lends itself to multiple activities and, although not guaranteed, a future value-add opportunity would be to have the whole site zoned Heavy Industry.
It is currently zoned Light Industry across the top two-thirds (approximately) of the site, and Heavy Industry on the southern third.
The tenant, Alderson Poultry Transport Ltd, is a very well-established logistics company with a 33-year history and 20 years of specialising in poultry transport. In addition to poultry transport, they offer a comprehensive range of complimentary services.
Alderson employs over 100 staff across the country and operates a fleet of over 100 vehicles, including trucks, trailers, forklifts, service vehicles and specialist equipment. This gives them the ability to service New Zealand’s poultry industry, from day old chicks to end of lays.
As part of their total logistics service, Alderson also provides a poultry catching service, equipment leasing and rental, labour hire and consultancy services.
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