T&G and PFI enter sale and leaseback of 22 Whakatu Road, Hastings
T&G Global is selling and leasing back its Whakatu West site at 22 Whakatu Road, Hastings, in a move which will generate $79.545 million to support its growth strategy.
The 9.56 hectare site is being sold to Property for Industry Limited (PFI). The property accommodates in excess of 36,000 square metres of T&G’s post-harvest operations in the Hawke’s Bay, including one of its packhouses, two cool stores, warehousing and 3.7 hectares of storage yard.
T&G Global’s Chief Executive, Gareth Edgecombe, says the transaction will help T&G free up capital to fuel its growth.
“By entering into a sale-leaseback agreement with PFI, we can unlock funds to reinvest back into our core business and new growth activities, while continuing to operate our post-harvest facilities out of the Hawke’s Bay,” says Gareth.
“With strong worldwide consumer demand for our premium apples, including Envy™ and JAZZ™, this capital will be used to fund our operations, continue building out our key global markets, and invest in new technology and our physical assets.
“The Hawke’s Bay is a pivotal region for our global business and long-term strategy, with about 60% of our apples grown in the region. With interest in commercial real estate at a real high, it made good business sense to recycle these funds into our growth.”
PFI Chief Executive, Simon Woodhams, says the acquisition of the site secures a specialised asset for PFI’s portfolio, occupied by a tenant operating an essential service.
“We’re excited about the acquisition of this key site in the Hawke’s Bay, which is a vital region in New Zealand’s high-value primary sector. We look forward to working with T&G into the future,” says Simon.
The 15-year triple-net leaseback arrangement with PFI provides T&G with rights of renewal for a further 20 years. The commencing annual rental is $3.5 million plus GST, with annual fixed rent reviews of 2.25%, with an adjustment to market on the seventh anniversary of the lease commencement date.
The unconditional acquisition, which reflects a yield of 4.4%, is expected to settle on 15 November 2021. Both parties will update the market upon the sale being concluded.