Monday, April 22, 2024

T&G and PFI sign sale-leaseback agreement

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T&G Global is selling and leasing back its Whakatu West site at 22 Whakatu Road, Hastings, in a move that will generate $79.545 million to support its growth strategy.
T&G’s New Zealand apple crop has now been fully harvested and overall NZ supply volumes are down 19% on last year.
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T&G says the sale-leaseback agreement will unlock funds to reinvest back into its core business and new growth activities.

T&G Global is selling and leasing back its Whakatu West site at 22 Whakatu Road, Hastings, in a move that 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 houses more than 36,000 square metres of T&G’s post-harvest operations in Hawke’s Bay, including one of its packhouses, two cool stores, warehousing and 3.7ha of storage yard.

T&G Global 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,” Edgercombe said.

“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,” Woodhams said.

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 November 15.

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