Fruit-growing giant T&G has sold one of its properties including warehouses and cool stores in Hawke's Bay for nearly $80 million to an investment company.
T&G says the sale will help free up capital to grow the business by using the money to "focus on expanding global growth of our premium Envy apple" and buying automated picking platforms and hydraladas.
The 9.56ha section of land and facilities at 22 Whakatu Rd in Whakatū has been sold for $79.5 million to Property for Industry Limited (PFI), an NZX-listed property investment and management company.
The company has a large property portfolio mainly based in Auckland and the sale marks its biggest purchase in Hawke's Bay.
The land will be leased back to T&G for the next 15 years, with an option for T&G to rent it for a further 20 years beyond that point.
The rental return is estimated to be $3.5 million a year and the prime site is located next to a railway line.
The site includes post-harvest facilities such as packhouses, cool stores, warehousing and a storage yard, which will all change ownership when the sale settles on November 15.
Property for Industry Limited chief executive Simon Woodhams said it was a big investment.
"From our point of view, it is a very strong tenant covenant," he said.
"It is across the road from the proposed inland port (and) it is a long-term lease with a good tenant."
Woodhams said there were no major plans to upgrade the site and "day to day I imagine it will be just the same for the team on-site".
Earlier this year, Napier Port turned down funding from the Government to help build an inland port at Whakatū - on a nearby site - which would make it easier to move produce to Napier Port via railway and road networks. The port has committed to building an inland port in Whakatu but says it won't begin the project for another five to 10 years.
The sale on Whakatu Rd comes just weeks after it was announced T&G was set to make millions of dollars selling another 40ha property in Meeanee, to a company opening a new apple orchard.
T&G Global chief executive Gareth Edgecombe said: "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."
He said the money would go towards growing the business "with a particular focus on expanding our global growth of our premium Envy apple, which is on track to be a billion-dollar brand in a few years' time".
"(It also) includes the purchase of new picking platforms and hydraladas ahead of the 2022 picking season."