Fletcher’s Head Office Site Sells For $36 m

Media Release
Date 2.3.2008

Fletcher’s Head Office Site Sells For $36 Million

One of the country’s largest privately-owned property development companies has bought Fletcher Building’s head office complex in Auckland in a transaction worth $36 million – the biggest commercial and industrial property sale in New Zealand so far this year.

Fletcher Building has entered into a sale and long-term lease back of the suite of properties located at 810 Great South Rd in Penrose to Tauranga-based Carrus Corporation Ltd.

The sale includes the landmark Fletcher House, Fletcher Building’s head office, as well as a number of other office and industrial buildings located on 2.2 hectares of land.

The sale was negotiated by Chris O’Brien of Fletcher Building, in conjunction with David Bayley, executive director of Bayleys Real Estate, and Ed Donald of Bayleys’ Auckland office.

The property comprises approximately 17,300 square metres of predominantly office accommodation, with the balance being industrial space with a significant area of under utilised land available for future development. Fletcher companies have occupied the site for the last 65 years and a lease back arrangement will see the company remain on site for the long-term.

Fletcher Building and Carrus Corporation have developed a heads of agreement that will enable joint venture site development in the future. Carrus Corporation Ltd, led by managing director Paul Adams, has a 20-year history of land and property development.

It has been the driving force behind a substantial number of residential subdivision projects in Tauranga, Mt Maunganui, Rotorua, Hamilton, Taupo, Palmerston North and Wellington, where the company has also developed an apartment complex on Oriental Parade.

Commercial developments to date include the Porirua Megacentre, and a number of Wellington projects - the Stout Street car park and the refurbishment of the State Insurance Building and Buckle St National Museum, now part of Massey University.

Adams said the Fletcher Building site acquisition was a logical fit for Carrus - enabling the company to secure a prime freehold investment property with further development potential and occupancy by one of New Zealand's blue chip companies.

Fletcher Building property advisor Chris O’Brien said the divestment of 810 Great South Road would enable the company to further focus on its key income producing business activities.

“We look forward to exploring expansion and development options for the site with Carrus in the years to come, as Fletcher Building expands its activities and Carrus identifies best purpose long-term uses for the vacant land adjacent to the existing commercial premises,” O’Brien said.

David Bayley said the Fletcher Building offering attracted interest both nationally and internationally.

“We offered the property for sale by invitation, and in addition to approaching investment and development companies within New Zealand, we also had a number of parties from South East Asia and the United States looking seriously at it,” Bayley said.

“The fall in both the New Zealand dollar and domestic interest rates, combined with the high income returns from New Zealand commercial property, is generating more enquiry from offshore. We expect that offshore interest to gather further momentum in 2009 – particularly from South-East Asian investors who are typically counter-cyclical with their buying patterns.”

ENDS

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