Prime Manawatu property has long-term brand tenant

3:33 PM Thursday December 3, 2015 Colin Taylor

This new industrial property in Feilding is leased long-term to a John Deere dealership.

A new industrial facility in the provincial Manawatu town of Feilding and lease long-term to a John Deere farm equipment dealership will go under the hammer next Friday unless it sells earlier by negotiation.

The 1700 sq m industrial building on an 8331 sq m freehold site, at 15 Darragh Rd, is being marketed by Doug Russell, Grant Lloyd and Phil Nevill of Colliers International and is scheduled to be auctioned on site at 10 am on December 11.

Russell says the property’s strong tenant covenant represents an outstanding passive investment opportunity.

“The tenant, Cervus Equipment, is an authorised dealer for John Deere agricultural equipment representing most of the North Island where it has seven, full service dealership branches and two Turf and commercial equipment stores.

“Cervus has committed to an initial lease term of 12 years from settlement, with three right-of-renewal terms of six years, and a net rental of $225,000 per annum plus GST and operating expenses.”

An established, international company, Cervus Equipment owns the largest group of John Deere agricultural equipment dealers in Canada, and recently acquired six stores in Australia.

“Cervus Equipment spent a considerable amount of time seeking a Feilding base and chose this prime industrial site to build on due to its location in a rural cluster of local, national and international companies,” Russell says. 

“The decision demonstrates a clear commitment to the premises. With such a strong tenant, combined with an excellent lease structure and a great location, all the fundamentals are in place for a solid investment opportunity.”

Russell says the newly-constructed building - comprised of steel portal frames, steel purlins with insulation at roof level, Longrun metal roofing and metal wall claddings - meets 100 per cent of New Building Standard (NBS) which is well above the 34 per cent threshold for potentially earthquake-prone buildings.

The property features a front showroom and office area, a large workshop, covered wash-down bay constructed of pre-cast concrete walls, a large upstairs staffroom facility, boardroom and training room and a secure yard.

“This heavy-duty building has been purpose-built to house heavy machinery and stand the test of time,” Russell says.

Lloyd says neighbouring businesses include Proag Products, Power Farming, Class Harvest Centre, Pioneer Seed & Grain and Ovation New Zealand.

“The location is further enhanced by the construction of a $24 million factory next door by American bio-firm Proliant after a three year search across New Zealand to find an appropriate site.

“Proliant employs about 30 people, with a payroll of $1.5 million, and is expected to pump $90 million into the national economy in the next decade.”

Lloyd says another positive development for the rural town this year has been the roll-out of ultra-fast broadband.

He says the Feilding area is most famous its stockyards which were once the largest in the southern hemisphere, selling 100,000 cattle and 600,000 sheep annually.

Nevill says Feilding, with its red-bricked pavements and flowerbeds, has been voted New Zealand’s Most Beautiful Town 14 times.

“A promising sign for investors and businesses is the town’s further CBD revitalisation and beautification to cater to expansion. As a service town for the surrounding farming district of rural Manawatu, Fielding already has thriving business environment, and the rapidly expanding industrial area reflects that.”

Nevill says an economic advantage the Manawatu district has over other regional New Zealand areas, is that it has easy access to four seaports, seven airports and major Defence Force bases.

“This make it a highly-strategic cargo, transport and business hub for the lower North Island and the country.”

“It’s also the gateway to four other regions – Rangitikei, Horowhenua, Wairarapa and Hawkes Bay,” Nevill says.