Bayleys Real Estate has sold 5 substantial retail properties to local & Singaporean investors for a total $100 million.
2 of the sales, totalling $66.45 million, which were settled during Covid-19 levels 4 & 3 lockdown, were of Auckland suburban shopping centres both anchored by Countdown supermarkets.
The larger of those was the Kelston Mall, which was sold on behalf of PMG Funds Ltd for $43.4 million at a 5.86% yield. The buyer was a private investor who attended a Bayleys Knight Frank Asian investment NZ seminar in Singapore.
Bayleys’ national commercial director, Ryan Johnson, said while some parts of the retail property market had taken a hit from the impact of Covid-19, other subsectors with occupants such as grocery businesses, supermarket-anchored neighbourhood shopping centres & pharmacies continued to attract a good level of investor enquiry.
“Buyers are distinguishing between discretionary & non-discretionary retail business tenancies. Kelston Mall has a good mix of the latter, with other major tenants in addition to Countdown, including a pharmacy & medical centre, a childcare centre & service station.”
The other neighbourhood shopping mall sale, the Meadowlands Shopping Plaza in Howick, was sold to a private New Zealand investor for $23.05 million at a 5.72% yield and settled last week.
Featured in Bayleys’ Total Property & Investment NZ portfolio, promoted in Asia late last year, the property attracted over 100 inquiries from domestic & offshore parties and 6 expressions of interest were submitted.
Mr Johnson said the Singaporean buyer of the Kelston Mall was the under-bidder on Meadowlands: “They were still keen to secure a similar type of property within 30km of Auckland’s cbd. We provided several other options, but Kelston was the one that best met their requirements and this sale was negotiated in an off-market transaction.”
Also selling to a Singapore-based investor, for $13.2 million at a 6.5% yield, were 2 retail offerings in the Wynyard Quarter developed & owned by Willis Bond & Co Ltd and marketed by Bayleys’ national director for retail sales & leasing, Chris Beasleigh, & Mr Johnson. Both properties are multi-tenanted, unit-titled premises on the ground floor of new luxury apartment buildings in the mixed use waterfront precinct.
“The buyer was an existing contact on Bayleys’ South-east Asian client database, attracted by the quality of development in the Wynyard Quarter, who foresees it becoming an increasingly sought-after location as the cbd continues to expand along the western waterfront area,” Mr Johnson said.
Another Countdown-anchored property, in the Fraser Cove shopping centre in Tauranga, has sold for $20 million at a 6.18% yield. The sale to syndicator Silverfin Capital Ltd was settled last month. Silverfin’s syndication of the property through 299 interests of $50,000 has been fully subscribed.
Commercial units on ground floor of 2 apartment developments with 128-year prepaid ground lease from December 2015, bought by the same Singapore-based private investor, both at 6.5% yields.
85 Daldy St/141-143 Pakenham St:
Features: 10 commercial units totalling 773m² on ground floor of cedar-clad Pavilions residential complex; 27-159m² tenancies (largest occupied by Williams Eatery); fully leased to mix of food & beverage and service businesses, weighted average lease term 6.1 years
Rent: $463,787/year net + gst with fixed annual increases of about 3%
Outcome: sold for $7.135 million at a 6.5% yield
Agents: Chris Beasleigh & Ryan Johnson
132 Halsey St:
Features: 5 retail & hospitality units totalling 493m², ranging from 66-160m², on the ground floor of 7-level apartment building with 113 luxury residences on the corner of Madden St; weighted average lease term 8.9 years, leases to food & beverage and real estate businesses
Rent: $400,405/year net + gst, fixed rental increases
Outcome: sold for $6.16 million
Agents: Chris Beasleigh & Ryan Johnson
Kelston Mall, 16 West Coast Rd:
Features: Suburban shopping centre on 2.1 ha site, 7741m² lettable area, 23 tenants, additional income streams from 4 ATMs, 2 cell towers & night markets; 98% occupancy, weighted average lease expiry 5.7 years; anchors include Countdown, McDonald’s, Mobil, Just Kidz Childcare Centre & Kelston Medical Centre, plus range of smaller tenants in the retail & service sectors; originally constructed in 1977 & expanded in 1997, further redeveloped last year, which included the construction of a purpose-built childcare centre and refurbishment of internal mall area
Rent: $2,545,254/year net + gst
Outcome: sold for $43.4 million at a 5.86% yield
Agents: Sunil Bhana, Ryan Johnson, Cameron Melhuish & James Hill in conjunction with Bayleys’ international partner Knight Frank
Meadowlands Shopping Plaza, 112 Whitford Rd:
Features: Suburban shopping centre on 1.886ha site with 5215m² of retail space & 303
common parking spaces; built in 1993, with a major renovation in 2011; 96.85% occupancy, weighted average term to lease expiry 5.2 years; anchored by Countdown, current lease until 2026; other longstanding, founding tenants include Unichem & AA; 12 tenancies have renewed their leases since 2018; local centre zoning provides development potential, allowing for buildings up to 4 storeys with residential on upper floors
Rent: $1,319,178/year net + gst
Outcome: sold for $23.05 million at a 5.72% yield
Agents: Cameron Melhuish, James Chan & Ryan Johnson
South of the Bombays
Bay of Plenty
243 Fraser Cover Rd:
Features: 5767m² site in the Fraser Cove shopping centre, 5977m² retail premises predominantly occupied by Countdown supermarket on 19-year lease from April 2009, extended to 2028 with rights of renewal until 2044; other tenants are Ajays Emporium & a health supplements store, with a weighted average lease term of 7.8 years; supermarket lease generates about 80% of the total income with rent reviewed every 3 years based on turnover, while the other 2 leases have fixed annual increases of 2.0% & 2.5%
Rent: $1,236,600/year net + gst, fixed rental increases
Outcome: sold for $20 million at a 6.18% yield
Agents: Mark Walton, Peter Gorton & Mike Houlker
Attribution: Agency release.