Macquarie Goodman Property Trust has partially sold and restructured its interests at the Fletcher Head Office property in Auckland to Fletcher Building for $NZ28.75 million.
The property is located at 810 Great South Road in Penrose. MGP first acquired an interest in the property in June 2004 with Fletcher Building Limited holding a headlease over the entire site with an initial expiry in March 2009.
Fletcher Building has held the head lease over the Penrose site since 2001, but has sub-let a large part of the property.
The restructure of the Penrose property interests means Fletcher Building will acquire the property to the east of Great South Road, comprising the corporate and construction head offices.
Fletcher Building will also enter into nine year leases of industrial premises for those properties occupied by group businesses on the property to the west of Great South Road.
The existing head lease for the whole Penrose complex will be surrendered, so releasing the company for the on-going contingent liability for the lease of the sub-let property.
Macquarie Goodman New Zealand chief executive John Dakin said the restructuring of our single largest lease provides a number of benefits to MGP unit holders.
“The revised terms increase the weighted average lease expiry of the portfolio while reducing customer specific risk and mitigating the uncertainty around the expiry in 2009,” he added.
MGP will retain ownership of the property on the west side of Great South Road, which will be subject to new leases with Fletchers for 23,934 sqm of industrial space and 3,104 sqm of office space for nine year terms.
AUT will remain a key customer on the site and the total net annual rent for the property will be approximately $NZ4.2 million.
Fletcher Building’s chief executive Jonathan Ling said the transaction allows the company greater flexibility with its Penrose properties and gives Fletcher the ability to consider the further development of the site.
Settlement due 31 March 2007.
By Kathryn O’Meara
