Record sale demonstrates attractiveness of Auckland industrial assets to International institutional capital

Overview

CBRE’s Capital Markets Industrial & Logistics team successfully negotiated the sale of GPC Asia Pacific’s New Zealand Distribution Centre in Wiri, Auckland – unquestionably the most significant investment-grade industrial asset seen on the New Zealand market for some time. The property sold for a record price to a limited partnership between local property investor Mayfair and global asset manager BlackRock. 

The asset 

This best-in-class distribution centre facility was purpose-designed for GPC Asia Pacific and completed in 2022. It includes a 28,250sqm warehouse along with offices and canopy areas. The asset demonstrates an impressive list of investment fundamentals, including an exceptional tenant covenant and a location in one of Auckland’s most sought after distribution centre precincts.

GPC Asia Pacific is a leading distributor of automotive and industrial parts in Australasia, part of a global group with an extensive network of over 10,000 locations across 17 countries. Among its businesses in New Zealand are the Repco and Napa auto parts stores. GPC has taken a new 15-year lease to the facility, with rights of renewal potentially extending the lease term to 30 years.

Campaign process

CBRE Capital Markets Industrial & Logistics represented GPC Asia Pacific and advised the company on its sale and leaseback of the property. An international on-market sales campaign attracted six formal bids from domestic, American, European and Australasian prospective buyers, totalling over $750 million in value.

Following selection of Mayfair and BlackRock as the preferred party, the CBRE team negotiated the terms of the deal on behalf of GPC. The purchaser then progressed through a comprehensive due diligence process including Overseas Investment Office approval, culminating in successful settlement of the deal in March 2024.

Outcome & analysis

This asset sets a new benchmark in the New Zealand industrial market in terms of its outstanding quality and international institutional-grade investment fundamentals. These factors were critical in achieving a record sale to a partnership which included a global heavyweight in the asset management sector. 

The acquisition strengthens BlackRock’s growing presence in the New Zealand industrial market and demonstrates the attractiveness of prime Auckland industrial property as an institutional-grade asset class. A shortage of quality assets, persistent low vacancy and stable to increasing rents in top-quality new premises continue to drive demand for prime industrial property. Although Auckland industrial vacancy increased over the first half of 2024, it remains very low at 1%, according to CBRE Research. 

CBRE Capital Markets Industrial & Logistics team has significant capital sidelined seeking similar high quality investment opportunities, which are rarely available. 

The deal also indicates that following a couple of years of uncertainty and reduced transaction volumes, market yields for prime industrial assets in Auckland appear to be stabilising. We expect to see transaction volumes increase through 2024 and 2025 as investors become more confident around market pricing levels and interest rates begin to fall.