Asset Plus Ltd has sold Heinz Wattie’s national distribution centre in Hastings to an Auckland-based syndicator at its current book value of $29.1 million, consistent with its strategy of divesting properties no longer considered “core”.
Asset Plus said in May it had received an off-market approach to acquire the property and had granted a period of exclusivity for due diligence to be completed. Chair Bruce Cotterill said yesterday the company had now signed an unconditional binding sale & purchase agreement with the buyer, E+O Property Syndication Ltd.
E+O – Erskine + Owen, directors & shareholders Alan Henderson & Lisa Phillips – syndicates property to wholesale investors. Its 2 most recent syndications were of smaller properties in Hastings.
Asset Plus has agreed to underwrite the $16.25 million of equity that will be raised for this syndicate, for a $487,500 fee. Settlement of the sale is scheduled for 17 December.
Mr Cotterill said that, following the sale, Asset Plus’s earnings were expected to drop on an annualised basis to 3.35c/share and gearing to 26%. The earnings impact excludes the effect of the one-off underwrite fee, which is expected to offset the lost rental income for the remainder of the financial year.
Mr Cotterill said the reduction in gearing would create additional balance sheet capability to support acquisitions & the development of 35 Graham St, which shareholders approved last month. Asset Plus is buying that property from Auckland Council for $58 million.
Erskine + Owen
17 June 2019: Asset Plus shareholders confirm Graham St deal
Attribution: Asset Plus release, E+O website.