Wholesale
Quarry Capital Limited

Duke Street Limited Partnership

Industrial Property

Register Interest

This is not an offer to the public. This offer is only available to investors certified as ‘wholesale investors’ within the meaning of clauses 3(2), 3(3)(a) and 3(3)(b) of Schedule 1 of the Financial Markets Conduct Act 2013.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to this offer because there is an exclusion for offers where the amount invested upfront by the investor (plus any other investments the investor has already made in the financial products) is $750,000 or more. As a result of this exclusion, you may not receive a complete and balanced set of information. You will also have fewer other legal protections for this investment.

Investments of this kind are not suitable for retail investors.

Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Transaction Size
NZD 10,100,000.00
Share Price
Minimum Investment
NZD 50,000.00
Issue Type
Industrial Property
Sector
Property

Quarry Capital Limited warmly invites wholesale investors to express interest in participating in the ownership of a strategically located industrial property in Sawyers Bay, Port Chalmers, Dunedin.

While the property has been settled (31 March 2021), new investors are able to participate in this Limited Partnership (LP) opportunity due to underwritten interests being available for purchase.

Key Features:

  • 7,700sqm warehouse on 1.33ha site strategically close to Port Chalmers
  • Construction is underway and completion is due during November 2021
  • New 12-year lease with 3 rights of renewal of 6 years to market leading sole tenant, Hilton Haulage Limited Partnership upon completion
  • Storage and logistics hub supporting import/export of food product (essential services)
  • 404 partnership interests of $25,000 available
  • Minimum investment of $50,000 (two interests)
  • Forecast pre-tax monthly cash distributions of 4% per annum during construction phase
  • Forecast pre-tax monthly cash distributions of 7% per annum upon completion
  • Total cost of property acquisition and construction is $17.6m, including:
    • $4.0m for land and demolition of existing warehouse
    • $12.725m fixed construction cost
    • $875,000 establishment fees
  • Investment will be funded by investor capital of $10.1m and a bank loan of $7.5m
  • (44.8% LVR)
  • Initial rent payable under the Lease will be $995,000 plus GST per annum with CPI rent increases annually on each anniversary of the commencement date that is not a market rent review date, and market rent reviews every 6 years from commencement date.

Overview:

This is an offer of partnership interest shares in the Duke Street Limited Partnership (“the LP”). The LP has used funds from tranche 1 to purchase a bare 1.33ha site close to Port Chalmers and will use funds from tranche to fund the construction of a new 7,700sqm building on the site.

Construction on the new facilities commenced on the 1st of April 2021, with construction anticipated to be completed during November. The land and existing building have been purchased for $4m and the fixed construction cost is $12.725m. Bank funding of $7.5m has been secured and will not be drawn down until completion of the Development.

On completion, the warehouse and office building will be leased to a market leading tenant, Hilton Haulage LP (“Hiltons”) under an initial lease term of 12 years with 3 rights of renewal of 6 years. Hiltons transport services include container, bulk, general, refrigerated, agricultural and crane operations alongside a significant off farm milk collection service that operates nationwide. Hiltons has also developed large scale warehousing services that complement the transport services with a focus on supporting the food sector. This is where the Duke Street property will form an integral role in the lower South Island.

LP interests can be purchased in two equal instalments. The first payment (50%) will purchase interests currently allocated to underwriters as part of the initial raise (tranche 1) and the second payment (50%) due on the 23rd of June will purchase new interests (tranche 2). From July onward, investors will be able to purchase interests directly from underwriters, subject to availability.

Quarry Capital Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which primarily invest in, or own, real property in New Zealand (other than forestry). Quarry currently manages four other managed investment schemes on behalf of over 200 investors.

The LP is not a portfolio investment entity (PIE). Investors are responsible to account for their own income tax.

Register your interest to be put in touch with the offeror and receive an Investment Memorandum for this opportunity.

Investment Summary - Duke Street Limited Partnership
April 15, 2021
15/4/2021
Quarry Brochure_April2021_EmailSpread
April 15, 2021
15/4/2021

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