T&G Apples

T&G Global is selling and leasing back its Whakatu West site in New Zealand’s Hawke’s Bay.

The 9.56ha site is being sold to Property for Industry Limited (PFI). The property accommodates some of T&G’s post-harvest operations in the Hawke’s Bay, including one of its packhouses, two cool stores, warehousing and 3.7ha of storage yard.

The move will generate NZ$79.54m to support the group’s growth strategy.

“By entering into a sale-leaseback agreement with PFI, we can unlock funds to reinvest back into our core business and new growth activities, while continuing to operate our post-harvest facilities out of the Hawke’s Bay,” said Gareth Edgecombe, chief executive of T&G Global.

“With strong worldwide consumer demand for our premium apples, including Envy and Jazz, this capital will be used to fund our operations, continue building out our key global markets, and invest in new technology and our physical assets.

“The Hawke’s Bay is a pivotal region for our global business and long-term strategy, with about 60 per cent of our apples grown in the region. With interest in commercial real estate at a real high, it made good business sense to recycle these funds into our growth.”

The 15-year triple-net leaseback arrangement with PFI provides T&G with rights of renewal for a further 20 years.

The commencing annual rental is NZ$3.m plus GST, with annual fixed rent reviews of 2.25 per cent, with an adjustment to market on the seventh anniversary of the lease commencement date.

The unconditional acquisition is expected to settle on 15 November.