Pumpkin Patch Update
29 November 2016
Earlier this month Trust Management released a newsletter article regarding Pumpkin Patch Limited (“PPL”) going into Receivership. On 21 November the Receiver announced that a purchaser for the business had not been identified and that Pumpkin Patch would be closing down its retail operations.
The positive news is that Trust Management is pleased to announce that a new 15 year lease for the office building at 433 East Tamaki Road, which was previously occupied by PPL, has been finalised with Maori Television Service (“MTS”).
The lease commenced with MTS on 25 November 2016. Please see the separate announcement for more information.
The leasing reflects a reduced rental exposure from what Pumpkin Patch was previously paying by nearly 50%.
The balance of the space occupied by PPL is its distribution centre and associated offices. The failure of Pumpkin Patch although disappointing has been signalled for some time. Trust Management had engaged with real estate agents regarding potential tenants to back fill the warehouse premises; now that we have more certainty of the vacancy following the Receivers recent announcement, we can progress the marketing of the premises as being available for lease.
The Receiver continues to pay the rental on these premises and we expect that rental will continue to be forth coming through until they vacate.
As at 31 October 2016 Trust Management had an updated valuation completed for the properties associated with the Pumpkin Patch site. This assessment undertaken by registered valuers was undertaken on the basis that all the space occupied by Pumpkin Patch was vacant and that a lease was likely to be completed with MTS. Due to the weak tenant covenant that Pumpkin Patch provided the valuation only reduced by 3.87% or $0.575m (being the Property Funds share) from the valuation undertaken as at 30 June 2016.
We will look to provide further updates on the leasing outlook in the first quarter of 2017.
Should you have any questions, please do not hesitate to contact Patrick O'Reilly (09 550 4056) or Grant Hope (09 550 4044)