KEY POINTS:
Investors have the chance to be proportional owners of the Bendon head office and international distribution centre on George Bolt Drive in the Auckland Airport industrial area.
Augusta Funds Management is offering 202 individual title interests in the 11,705sq m high-profile industrial building.
Mike Houlker and David Gubb,
of Bayleys Real Estate, have been appointed to manage the sale of freehold title interests in the building, which are available in units of $50,000.
The scheme is forecast to provide an initial cash return of 10 per cent per annum, and investors can apply for one or more units, giving them a proportionate interest to the registered freehold title of the property.
Minimum rental growth of 3 per cent per annum is one of the attractive features of the new property ownership scheme.
The complex is located on a 1.6ha site in a prominent position on George Bolt Drive (SH20), the main road to and from the airport.
Houlker says the property's rent-review structure is a very attractive one from an investor's point of view.
The property has an initial 11-year lease to Bendon until 2018, with the rent reviewed upwards in October each year to the greater of either 3 per cent, the Consumer Price Index or market rates.
"The 3 per cent minimum increase is significant in a market where rental growth and inflation are expected to be relatively subdued in the near term."
Houlker says both the 3-year-old Bendon head office building and the high-stud warehouse complex have been built to a very high standard for the company.
"It's recognised within the industry as one of the best of the new distribution centres that have been developed to international standards in New Zealand in the last few years.
"In more than 20 years of selling commercial and industrial properties, it's certainly one of the most well designed and impressive complexes that I have been involved in marketing," Houlker says.
Bendon's 2587sq m head office includes a reception area, executive offices and meeting rooms, and open-plan office and associated amenities.
Houlker says the fully air-conditioned building has been developed to high specifications, with a stud height of 2.85m rising to more than 3.7m and specialist lighting throughout for design-related activities.
Houlker says the 9118sq m drive-through warehouse, Bendon's distribution centre for Australasia and the Middle East, incorporates the latest in distribution-centre design efficiencies.
He says it has a high stud height by New Zealand standards, from 10.7m to 13.5m, and minimal internal columns maximise storage capacity.
Augusta Group managing director Mark Francis says there will be significant depreciation benefits for investors.
As part of the management service it provides, Augusta sends investors an annual depreciation schedule that provides a pro rata allocation of their share of the depreciation the buildings and the fixtures and fittings.
"Because of the newness of the building there will be substantial depreciation allowances that can be offset against the taxable income generated from the rental payments, particularly in the early years of the scheme."
Francis says the Bendon syndication will be structured along the same lines as previous, successful proportionate ownership schemes promoted by Augusta.
It has secured a bank loan for just under half of the $19.1 million sale price of the building, with the balance to be secured by subscriptions from investors.
Francis says the gearing on the property enables an attractive return on equity to be provided to investors now that borrowing costs are significantly lower than property yields.
Gubb says the Bendon property is also in a very strong location in the heart of the rapidly expanding Auckland Airport industrial zone and benefits from exceptional exposure to George Bolt Memorial Drive, Airpark Drive and Montgomerie Rd. Bendon have made good use of this, with external signage to all sides of the premises.
The property is part of the Airpark Business Centre within the Auckland Airport industrial area, which is home to a number of large logistics companies.
Gubb says design guidelines and rules have been put in place within the Airpark Business Centre to ensure that further development will be of a standard that ensures the quality and value of the industrial estate is maintained.
Bendon has two further six-year rights of renewal beyond its initial lease until 2018, which means it could potentially be in occupation in the building until 2030.
Bendon is a long-established New Zealand company, with a 60-year history in fashion-apparel design and marketing.
The company began with the Hurley brothers' innovative idea to create women's lingerie that would "bend on" the body, marking a departure from the restrictive corsets of the time.
It has since grown to become an international company, operating throughout Australasia as well as the Middle East, United States and Britain.
Its brands include Bendon Lingerie, Bendon Sport, Elle Macpherson Intimates, Fayreform, Hey Sister, Bendon Man and Macpherson Men.
