Landmark Christchurch industrial property offered for syndication

Metro Glass premises offered under proportionate ownership scheme

A landmark warehouse and showroom property in the sought-after Christchurch industrial suburb of Hornby is being offered to investors through a proportionate ownership scheme.

Silverfin Capital Limited has appointed Colliers International to market the syndication of 704 Halswell Junction Road, Hornby.

The 22,004sq m industrial property is the flagship facility of long-term tenant Metropolitan Glass and Glazing Limited (Metro Glass), a leading manufacturer and installer of double glazed windows and doors.

The 9,663sq m premises were design built for the company in 2004, and Metro Glass recently extended its lease until 2026.

Metro Glass is Australasia’s leading manufacturer and installer of double glazed windows for both new and retrofit residential properties, as well as commercial construction.

It has an extensive network of four processing and 16 distribution or retail sites across New Zealand. Metro Glass also operates two processing and distribution sites in Melbourne and Sydney, via its subsidiary Australian Glass Group.

Metro Glass’ parent company, Metro Performance Glass Limited, is listed on the New Zealand Stock Exchange and Australian Stock Exchange.

Silverfin is offering wholesale and eligible investors a chance to acquire a beneficial interest in the property’s buildings and land.

The 704 Halswell Junction Road Scheme comprises 201 investment parcels of $50,000 each.

Investors are projected to receive a pre-tax cash return of 7.75 per cent per annum, forecast to 31 March 2020.

Colliers International Syndications Director Charlie Oscroft says it is an opportunity to secure a foothold in New Zealand’s buoyant industrial property sector without significant capital outlay.

“Christchurch’s industrial market continues to go from strength to strength, with strong demand and low vacancy rates,” he says.

“This demand is evidenced by significant investor interest in 704 Halswell Junction Road, which Silverfin purchased for $18.6 million last month, representing a 6.6 per cent yield on rental.

“Silverfin is now giving private investors and family trusts a chance to capitalise on the property’s strong fundamentals through this proportionate ownership scheme.”

Situated on a substantial freehold section of 2.2ha, the two-level building features a conventional mix of quality showroom, offices and medium stud warehousing, with about 10 per cent office and 90 per cent warehouse.

The property was recently upgraded with a new 330sq m warehouse extension completed in 2016.

“The double span warehouse is efficiently laid out with 18 strategically placed roller doors, allowing for loading and drive-through access,” Oscroft says.

“The full-height feature showroom, designed by Sumich Chaplin, offers maximum profile and street appeal to the main arterial route of Haswell Junction Road.

“Two levels of well-appointed modern office space are located behind the showroom.”

Colliers International Investment Sales Broker Kris Ongley says the site has a substantial 3,200sq m of yard space, offering full drive around access, two access points, expansive truck parking and container laydown areas, and good on-site car parking.

The building footprint is only about 42 per cent of the site, making further expansion possible.

“Metro Glass operates the site around the clock, six and half days a week, making it an integral part of its South Island operations,” Ongley says.

“The tenant is very heavily invested in this site and confirmed that the property works very well for their business.”

Ongley says the property is superbly located within the Hornby area, which is one of the most sought-after industrial locations in Christchurch.

“Hornby continues to grow at a rapid pace, with its extensive network of existing and new roading developments among the big drivers of industrial demand.”

The property is well positioned near the highly sought-after corner of Shands Road and Halswell Junction Road, which has recently been upgraded to improve traffic flows.

Halswell Junction Road links through to the Southern Motorway extension, which is currently under construction.

“Once complete, it will be one of the most significant roading projects in Canterbury’s history, greatly enhancing travel times for southbound traffic heading to Rolleston and beyond,” Ongley says.

The major Shands Road off-ramp system will provide a vital link to this new motorway system and will increase accessibility to the subject site, further enhancing its attributes as an industrial location. 

The property was developed by Calder Stewart, which has a track record of quality industrial and commercial construction in the South Island.

A Detailed Seismic Assessment report, completed in April 2018, found the building met 70 per cent of new building standards (NBS). The seismic rating means the building is not deemed either earthquake prone or at risk, and no structural strengthening is required under current regulations.

However, as part of the sale to Silverfin, the vendor has agreed to carry out seismic strengthening work to bring the building to 100 per cent NBS. 

The estimated repair cost of $247,500 plus GST will be held in a trust account until the work is completed by the vendor, or paid to Silverfin if not complete within 18 months of settlement.

The 704 Halswell Junction Road Scheme is managed by Silverfin, a licensed manager of managed investment schemes (excluding managed funds) that invest in real property.

Silverfin Managing Director Cheryl Macaulay says the scheme is structured to provide investors with a cash return from industrial real estate, without the burdens of private property ownership.

“Silverfin will manage the scheme and provide day-to-day facilities and property management services for the property,” she says.

“Our directors and management have considerable experience in property development, facilities and asset management, property investment, business administration and accounting.” 

Silverfin currently has some $200 million of commercial property assets under management.

Silverfin draws on Macaulay’s 18 years of commercial property and syndication experience.

“We are very pleased to be able to bring an industrial property of the quality of 704 Halswell Junction Road to our investors,” she says.

“The location, combined with the construction quality of the building and the tenant covenant, makes it a very attractive investment proposition and property that Silverfin is happy to put its name to.”

The offer closes at 5pm on Friday, 11 May unless extended, withdrawn, or closed earlier.

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