1493695936910 - Tait wants to cash up its property for $58m

Tait wants to cash up its property for $58m

The Tait Foundation hopes to sell its Christchurch headquarters at Burnside for $58 million.

It will use the money for investment in subsidiary, Tait Communications, which has a 15-year lease on the three-year old property. 

Tait Communications currently pays the rent plus annual company dividends to the Foundation for disbursement to various causes, including reinvestment in the company. 

“The money from the sale will be reinvested in the company which in turn will support increased dividends to the Foundation,” executive director Garry Diack​ said.

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Another source within the company said the need for new capital was no secret among staff.

It follows the sale last year of 5.3 hectares of land next to the campus.

Diack said there were alternative funding sources but they reduced control and ownership by the Foundation, set up by the late Sir Angus Tait many years ago.

“If you raise bank loans it compromises performance because you have to pay back the debt. 

“Any technology (company) is debt averse. There’s no doubt about that.

“The sale is not about performance of the company. This is investing in the future. There are big changes in the radio industry with migration from analogue to digital and moving to cellular based networks with our US investment with the Harris corporation.  

“The Foundation carried out the original property development and got it off to a great start but there are benefits of having someone who is more of a property manager and developer which is not necessarily the core activity of the Foundation,” Diack said.

He was unsure of the exact amount of sale proceeds that would flow through to the company after costs or debt were accounted for.

The sale includes the offices and assembly area for Tait Communications. 

The company has undergone a number of changes in recent years under Diack who was appointed as a change manager in 2014.

Hamish Doig, managing director of the Colliers International agency in Christchurch, who is marketing the technology campus with investment broker Noel Gilchrist, said the two buildings were offered for sale as one lot or could be bought separately.

Tait has a 15-year lease on both.

Based on the $58m price the head office has an asking yield of 7 per cent, and the assembly plant of 8.25 per cent.

“The two buildings offered for sale are a trophy purchase that will offer excellent returns over the years to come,”Doig said.

The head office at 245 Woolridge Rd is on 2.2 hectares, and returns a net rental of $2.557 million a year. The rentable floor area covers 6834 square metres, including 273 car parks.

The assembly plant at 558 Wairakei Rd has a land area of 2.7 ha with net rent a year of $1.751 million. the rental floor area covers 11,394sq m, including 232 car parks.

The total campus comprises 13.518ha, some of which is future development land.

During the past 25 years Burnside has become a software and electronic development and manufacturing location with recent developments including Technology Park in nearby Sir William Pickering Drive.

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