"We were drawn to it because it invests in industrial property which we think is a very good sector of both the New Zealand and the property market and it's an area we have been involved with in Direct Property and with development activities," he said, citing one of the larger developments at 15 Jomac Place, Avondale, a $1.3 million property developed by McDougall Reidy, leased to Southern Spars and now in Direct Property.
He also cited involvement in The Gate, the large Penrose industrial development, sold to listed landlord Goodman Property Trust in 2002.
Reidy credited Carl Blanchard, director of investment banking at First New Zealand Capital, with being central to the deal to buy Property For Industry's management.
"It's fair to say we have been dealing with First NZ for a number of years and it sort of evolved where he made the introductions to the right people at AMP Capital," Reidy said, saying AMP's Sydney-based Andrew Bird, director and chief investment officer for property, along with Graham Law, managing director of AMP Capital Investors New Zealand, were closely involved as well.
As for future staffing needs, Reidy said these were being discussed but the business had some "capacity in our management side" and saying McDougall Reidy had a staff of nine.
The management sale deal is not due to settle until January 20 and Reidy said there was still some distance to go.
No price was disclosed on the deal which drew praise from OnePath's Craig Tyson and Mint Asset Management's Shane Solly who said they were pleased to see Property For Industry's management in the hands of interests associated with Auckland property experts Reidy and McDougall who had an established track record and would be good for the business. It has 50 industrial properties worth about $350 million.
Fund managers have for some time shown a keen interest in Direct's growing property business, seeing it as having the potential to list on NZX.
While many private developers are bankrupt and the sector is in a slump, the McDougall Reidy/Direct business is expanding, linking up with other businesses such as the Quest short-stay accommodation business, developing big new buildings at Parnell and Albany.
On September 1, Direct's 15-year lease to Quest at Albany started.
In May, Direct did one of its biggest deals when it sold 9 Pacific Rise, Mt Wellington for $7 million. The building had been refurbished for Mercedes-Benz New Zealand and was sold at auction.
Property For Industry said the business buying the management was PFIM and that AMP Capital Investors and PFIM had agreed on a transition period and process to ensure a seamless change of manager.
"Over the next month, AMP Capital Investors will work closely with PFIM to transfer intellectual property and management systems to PFIM," Property For Industry said.
Direct says its portfolio has 32 properties valued at $383.5 million, with an average weighted lease term of the portfolio of 7.2 years.
Its most valuable property is the $5 million Carlaw Park commercial precinct where it developed and leases offices to Datacraft, Department of Conservation, Lollipops Educare, Nestle, NZ Institute of Chartered Accountants and Sinclair Knight Merz.
