Investors herd to Hornby as key dairy food factory goes up for sale
The large facility on more than a hectare of freehold land sits at a prominent corner in the heart of the Christchurch industrial stronghold of Hornby.
The property for sale at 719 Halswell Junction Road is fully leased to NZX-listed subsidiary tenant Dairyworks Limited which uses it as its main food processing and distribution factory.
Established in Temuka in 2001, Dairyworks moved production to Christchurch in 2006 to meet growing demand. The company today serves retail and foodservice customers with a range of premium milk, butter and cheese products as well as snacking and protein items.
The company’s Alpine, Dairyworks and Rolling Meadow brands are a familiar sight on supermarket shelves throughout New Zealand and the company also exports to Australia. Dairyworks was recently purchased by Canterbury-based NZX-listed Synlait Milk.
Dairyworks’ tenancy at the Hornby facility generates net rental income of $606,573 per annum on a lease that runs through to 2029, with two further five-year rights of renewal. The lease agreement incorporates two-yearly market rent reviews.
The freehold land and buildings at 719 Halswell Junction Road, Hornby, are now being marketed for sale by deadline private treaty closing on Friday 3 December, through Bayleys Real Estate.
The property sits at the corner of Halswell Junction Road and Connaught Drive. It consists of a building of some 4,096 square metres on an approximately 11,110-square metre freehold site.
Bayleys Christchurch Industrial sales broker Nick O’Styke said the building was originally constructed in 1995 and had since been refurbished and reconfigured to provide a mix of contemporary offices, amenities and food processing areas with associated cool storage, distribution and loading spaces.
“This modern and well-configured high-stud warehouse building represents an A-grade industrial facility, positioned on a substantial, well-located landholding.
“The highly functional site enjoys dual access via two entry and exit points on Connaught Drive. It contains 35 on-site car parks and a generous concrete yard allowing easy movement of trucks onto and around the property.
“The large yard area also offers the flexibility to add to the property in the future,” O’Styke said.
The Halswell Junction Road building has an A-grade Initial Evaluation Procedure seismic rating of 85 percent of new building standard.
Bayleys Industrial and Logistics national director Scott Campbell said investor interest was expected from well beyond Christchurch.
“COVID-19 has reinforced the fundamental strengths of industrial property, which has continued to perform strongly, particularly when combined with tenants in essential industries such as dairy and foodservice.
“An offering of this quality, in this strategic main centre location, with a blue-chip essential service tenant and strong lease covenant, is sure to turn heads among buyers seeking a passive investment of the highest quality.
“Recent industrial sales in surrounding areas have typically produced yields of 4.5 to 5.5 percent.
“We expect the Halswell Junction site to gain the attention of industrial property investors throughout New Zealand,” said Campbell.
The property sits within the Industrial Heavy zone under Christchurch’s district plan, allowing for a range of intensive industrial activities.
The Hornby industrial precinct is home to multiple uses such as automotive and building supplies, engineering, bulk storage, logistics and distribution. Major businesses in the area include Tegel, Heinz Watties and Foodstuffs.
O’Styke said the property for sale was well served by its location about 300 metres from State Highway 1 and a little over two kilometres from Christchurch’s Southern Motorway.
“Excellent road and rail access and proximity to Christchurch International Airport, as well as the CBD just 11 kilometres away, are among the key reasons why Hornby is widely considered to be one of the city’s premium industrial locations.
“The Hornby industrial precinct is well established and has excellent infrastructure to cope with the burgeoning demand, including ample power services and staff amenities in the immediate location,” said O’Styke.
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