Buying a company time to plan its next move

The brief

With an eye to the future, our client was looking to divest its ageing food processing plant. What the company needed was a valuation for disposal purposes, as well as a lease back option to continue production while a new plant was built.

 

The solution

Food processing plants with multiple buildings and specialised assets were few and far between in Auckland, making our task of providing a valuation tricky. There was also the challenge of putting a dollar value on the untapped potential of the large excess land holding.

Tackling this valuation as both an investment opportunity and redevelopment proposition, we searched for comparable food processing plants in the region, such as the new Lion Brewery in East Tamaki, to establish a fair and accurate market price.

Food processing buildings generally carry a small premium because of the additional interior fit-outs. But in this case the buildings and their fit-outs were quite rundown, meaning there was unlikely to be any extra rental benefit for new owners.

 

The outcome

Following our assessment of the various potential scenarios, we arrived at a valuation that our client was happy with. We also recommended a six-year holding lease, which was exercised on selling the property for an above valuation price. This gave the company enough time to cement its next steps in the market.

 

Location: Auckland
Sector: Food
Services: Property valuation – divestment