Lease term completion prompts sale

01-10-2008 | Not Specified

Rural Equities Limited oversee Puketotara's operations on behalf of New Zealand Rural Property Trust (NZRPT) who are now directly farming the property pending its sale.

Rural Equities chief executive officer Brian Burrough says the decision to sell the property was prompted by the end of the lease agreement with long time lessee Eric Anderson.

"Over the time we have had the property with Eric leasing it there has been an ongoing process of redevelopment and upgrading, the aim being to increase Puketotara's productive capacity and ultimately its value," he says.

As well as the stumping and development of the flats for cropping, upgrading has included significantly intensifying subdivision, upgrading water supplies and improvements in farm infrastructure and vehicle access with an all weather road and raceway system throughout the property.

Burrough believes there are few lease agreements that run as long or as successfully as the one at Puketotara, with a strong level of mutual respect and co-operation on both sides of the lease agreement.

He says selling Puketotara will provide the trust with an opportunity to reallocate some capital.

Although no decisions on this will be made until the sale of Puketotara is confirmed, conversion of some South Island properties to dairying is a possibility. The trust's farm portfolio includes 18 South Island properties and 12 in the North Island.

"We prefer to run a low level of debt in the business, and the end of the lease agreement provided an opportune time for us to review what we wanted to do with Puketotara."

Before the purchase by NZRPT the station was owned by carpet tycoon Douglas Bremner of Bremworth Carpets. He farmed the celebrated Drysdale sheep on the property at that time, in a true paddock to product style, providing wool for company carpets. A piece of this history remains today in the homestead lounge where the carpet features an extra heavy wool made especially for Bremner.

The sale by tender is being overseen by Mike Fraser-Jones of Bayleys. He says properties of Puketotara's scale and level of development are rare in the Waikato and interest is being received from a broad spectrum of buyers.

"Given the uncertainty we are seeing in many parts of the economy, investors are looking for safe assets, and rural land is looking more secure than most investments at present," he says.

With its proximity to Waikato dairy country the thought of conversion potential would play on some investor's minds. However given the high standard of pasture and raceways the property offered an excellent "walk in" opportunity as it was.

Settlement and possession is expected to be in February, 2009.

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