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Roadshow signs up for new PFI development

By Chris Hutching

Friday 13th June 2003

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With its investment portfolio 100% leased, listed Property For Industry is looking to boost future earnings through new developments such as the new $4.2 million office and distribution premises to be built at the company's Peninsula Business Park in Auckland.

PFI has clinched a deal to build the 3980sq m facility for film distributor Roadshow Entertainment NZ at the 686 Rosebank Rd property and construction will begin soon for completion in early 2004. It will be used for storage and distribution of videos and DVDs.

PFI general manager Peter Alexander said yesterday that Roadshow had signed a 10-year lease, providing an initial yield of 9.5% on the project cost including the cost of the land.

The proximity of the Auckland central business district and motorways attracted Roadshow, which has outgrown its current premises at Wiremu St, Balmoral.

Conor Collier, the PFI investment manager responsible for the Peninsula Business Park project, said the 3.7ha property had been owned by PFI since 1996. Although the buildings were fully leased, the current site coverage was only 25%, giving scope for further development.

The development potential is significant for PFI going forward because, as it announced late last week, the properties in its $210 million portfolio are now 100% leased after securing Australian listed company CMI on a 12-year lease with two-yearly reviews in 3974sq m of office and warehouse space at 7A Carmont Place, Mt Wellington and securing direct marketer Deltarg Ltd, a subsidiary of Australian listed company, Salmat, on a six-year lease at 417 Church St, Penrose.

Future growth will come from further developments, rent reviews next year, and possibly acquisitions.

Mr Collier said commercial tenants had become more interested in central Auckland locations such as the Rosebank Rd area given traffic congestion and construction of the new motorway interchange.

"Over the next 10 years, PFI plans to add up to 7800sq m of lettable space at Peninsula Business Park and refurbish 2000sq m as leases expire or existing tenants expand," Mr Collier said.

"The Roadshow facility will set the standard ­ in terms of tenant quality, design and construction ­ that we will follow for the rest of the development."

Jason Seymour and Nigel Ingham of Colliers International introduced Roadshow to the site.

PFI has announced two other projects this year ­ a $6.5 million design-build project under way in Auckland's Airport Oaks for pharmaceutical supply chain specialist Healthcare Logistics and in Wellington's Seaview, PFI has just completed a refurbishment of a building purchased earlier in the year for New Zealand Caterpillar agent Gough Gough & Hamer.

PFI's investment portfolio comprises 46 properties, with a total value of more than $210 million. It is the only listed property company investing exclusively in the New Zealand industrial property sector and has a policy of paying out 100% of operating earnings as quarterly dividends.

The company is managed by AMP Henderson Global Investors. It is looking for a new general manager because Mr Alexander is taking up another position with AMP Henderson.

PFI has been a solid performer, paying quarterly dividends with the share price trading at 95c, above net tangible asset backing of 77c a share, providing dividend yield of 7.4%.

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