Tui Products, which moved into its purpose-built new Tauranga headquarters in 2014, has announced that building owner Pacific Property will be building a $1.5 million 1500sq m extension to help it meet faster than expected growth in demand.
The expansion will bring Tui Products total built space to 12,000sq m on the Truman Lane property. Tui had about 85 staff throughout NZ, with around 60 based in Tauranga. The extension would not impact staffing as the additional space would be devoted to extra storage capacity.
"We always had provision for expansion," said Tui managing director and co-owner Don Forgie. "But we didn't expect to do it so early. We've had very good growth over the past three-to-four years."
Tui originally formed a 50-50 joint venture with Wallace Developments to fund and develop the project, then the developer partners sold the building to Pacific Properties for around $12 million and entered into a 20-year lease back agreement.
The expansion was being funded out of a new $15 million capital raise by Pacific Property, which was managed by Property Managers Group (PMG). The funds were a mix of approximately 55 per cent equity to debt and would also go towards the purchase of two commercial office properties based in Auckland.
PMG chief executive Scott McKenzie said the offer had been oversubscribed, and suggested there was good appetite for an additional capital raise to fund further properties, which Pacific Property was expected to announce before the end of the year.
"And while a large number of the investors are local to the BOP, there was also interest from outside the region," he said.
Filling the offer was helped by the fact that Tui was a key tenant, he added.
"Tui Products is now a national success story, having grown much faster than anticipated in the last two years."
Mr Forgie said Tui first spoke to PMG about an expansion in June 2015 when it became clear they were going to need more storage space.
"Property Managers Group were very receptive," Mr Forgie said. "They have taken a real interest in the Tui business and genuinely care about our success."
Tui relocated from Palmerston North to its new head office in Tauranga, which was its main manufacturing site and centre for North Island distribution. It also had a distribution operation in Christchurch and manufacturing in Invercargill.
"It's been brilliant, being based in Tauranga," said Mr Forgie. "From a staff point of view the lifestyle is obviously great." The location worked very well in terms of sourcing raw materials, and distribution, he said.
Construction was expected to begin in early December and be completed by April 2017.
"It's fabulous to see significant organisations and brands like Tui Products choosing to locate themselves in the BOP and continuing to expand from here," said Priority One acting chief executive Greg Simmonds.
• Tauranga headquartered
• New Zealand-owned and operated
• Established 100 years ago.
• Grown since 2002 under new ownership and a new business structure.