PMG Property Funds Management Ltd’s unlisted Pacific Property Fund Ltd launched its 7th capital-raising this week, for $42 million to buy the 3ha Seaview industrial park in Wellington.
It includes the site occupied by the Ford Motor Co for 50 years until 1988.
PMG is offering 36-40 million shares in the fund at $1.05/share, minimum parcel $21,000.
The industrial park at 43 Seaview Rd through to 120 Hutt Park Rd is Pacific Property’s first Wellington investment. The fund will buy it for $56.17 million after the capital-raising closes, scheduled for 25 September.
The yield on total current rent of $4.35 million is 7.75%.
Pacific Property’s previous 12 acquisitions since it was launched in 2014 were in Auckland, Hamilton, Tauranga, Whangarei, Palmerston North & Christchurch.
This transaction will increase the fund’s portfolio from $189 million to $250 million, 62% weighted to industrial.
The company is forecasting an increased equivalent annualised pretax gross dividend return of 7.35c/share from 1 October, up from 7.25c/share.
Bayleys Valuations Ltd said in its May report for the capital-raising that Seaview is the largest industrial precinct in the Wellington region: “Many of the original warehouse & manufacturing occupants have relocated to other regions, and such accommodation has progressively been backfilled by transport-based operations & for logistics storage purposes.
“Tenant take-up has seen occupied space within the precinct increase by approximately 23,000m² – reflecting the growth in demand for premises within the area and a general tightening of the market. Vacancy rates have fallen across all major Wellington precincts over the past 12 months, reflecting the current high levels of occupier demand.”
According to the valuation report, Seaview vacancies have dropped from 4.3% in 2016 to 2.5% in 2018 and 0.2% in the first quarter of 2019, due to a number of larger occupiers moving into the area, including Kiwi Bus Builders moving to 43 Seaview Rd from Tauranga.
The current owners, Vendor Land Innovation (No.1) Ltd & IPOH NZ Ltd, are headed by Wellington property developers Richard Burrell & George Wilkinson.
43 Seaview Rd was occupied by the Ford Motor Co from 1937 until 1988. The building has recently been converted & upgraded to house multiple mixed-use tenancies, and its seismic rating has been raised to 70% of new building standard.
Within the Seaview Rd title, the current owners have developed a 1200m² warehouse & office at 118 Hutt Park Rd, leased to a single tenant, United Industries Ltd. It has a 100% new building standard rating.
16 April 2019: PMG capital-raising closes fully subscribed
10 December 2018: Pacific Property offer fully subscribed
9 November 2018: PMG looks to add 2 properties to unlisted Pacific fund
Attribution: Company release, product disclosure statement.