Archive | Stride (DNZ)

Stride sells Albany property to Oyster, buys Concourse from Goodman

Stride Property Ltd has unconditionally agreed the sale of one property to property & funds manager Oyster Management Ltd and the purchase of another from the Goodman Property Trust.

The sale:



33 Corinthian Drive:
Features: tenant ASB Bank Ltd
Outcome: unconditional agreement for sale for $50.5 million, settlement scheduled for 1 April 2019, representing an initial yield of 5.88% and a 4.7% premium to the property’s value of $48.25 million as recorded in Stride’s September half-year accounts

Stride has committed to undertake $600,000 of upgrade works before settlement.

The sale was signalled earlier this year. Stride chief executive Philip Littlewood said today: “This transaction aligns with Stride’s strategy to recycle capital from non-core assets and into office & industrial assets that we consider will form the base of portfolios that will, in future, become Stride’s new investment management products. We are delighted to end the year with this positive result.”

The purchase:



The Concourse, 1-11 Selwood Rd & 6-12 The Concourse:
Features: 4ha industrial property adjoining State Highway 16 – 1.84ha with established buildings, 9700m² of industrial space, 2.17ha of development land, the former Alloy Yachts premises & an adjoining industrial property
Outcome: sold for $35 million following an unsolicited offer, settlement scheduled for 27 June 2019, initial yield for Stride of 6.1%

Mr Littlewood said: “This acquisition aligns with Stride’s strategic investment focus on growing its portfolio of quality industrial investment property, and builds on the Stride Property Group’s track record of industrial development expertise, following on from its comprehensive development of 6 buildings at O’Rorke Rd, Penrose, and the recently announced development of its property at Springs Rd, East Tamaki.

“Stride focuses on acquiring & developing properties in key industrial locations which are well serviced with connection to significant roading infrastructure. The West Auckland site has immediate access to the Lincoln Rd interchange, with connectivity north via the Western Ring Route and south via the Waterview tunnel.”

Investment management director James Spence, of the Goodman trust’s manager, Goodman (NZ) Ltd, said: “We’ve added significant value since acquiring the asset in 2016, reconfiguring the layout, creating additional yard space and securing new leases. It was a compelling offer from Stride and, rather than complete the development of this property, we’ll be reinvesting in new opportunities elsewhere in Auckland.”

The sale adds about 0.5c/unit to the Goodman trust’s net tangible asset backing.

Earlier stories:
18 July 2017: Goodman settles Henderson purchase
22 October 2012: DNZ confirms purchase of development site between 2 of its Albany buildings
13 August 2012: DNZ buys Corinthian Drive building, conditional on development site

Attribution: Company releases.

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Asset sales & revaluations lift Stride result

Asset sales & revaluations lifted Stride Property Group’s profit for the September half, but reduced net rental income.

$23.6 million of revaluations lifted portfolio value by 2.7% to $934.5 million. 3 properties were subject to desktop reviews and 14 to full valuations as at 30 September.

Stride chair Tim Storey & chief executive Philip Littlewood said completed asset disposals & higher valuations had contributed to a lower bank loan:value ratio of 34.2% and higher net tangible asset backing
They expect management fee income to be higher over the second half as development activity on committed projects increases.

A stapled security of the Stride Property Group comprises one ordinary share in Stride Property Ltd & one ordinary share in Stride Investment Management Ltd. The group continues to investigate adding more funds to its management portfolio.

Results for the September half-year (September 2017 results in brackets):

  • Net rental income $27.9 million ($29.5 million), lower primarily due to the divestment of 3 Bunnings-operated properties to Investore Property Ltd and sale of the development at Springs Rd, East Tamaki
  • Pretax profit up 13.5% to $44.1 million ($38.8 million)
  • After-tax profit up 20.8% to $40.2 million ($33.3 million)
  • Net distributable profit down 0.7% to $19.6 million ($19.7 million) or 5.37c/share (5.41c/share)
  • Net tangible assets/share up 3% since March to $1.88, excluding value of management contracts ($1.82 at 31 March)
  • Loan:value ratio 34.2% consistent with March, down from 38.8% in September 2017
  • Targeting a combined 9.91c/share cash dividend for the full year


  • Occupancy up 2.2% to 98.9% (96.7%)
  • Weighted average lease term maintained at 5.1 years
  • Significantly improved lease expiry profile for the next 2 years, reducing from 18.7% in March to 12.2% in September
  • Total leasing transactions, including rent reviews, renewals & new lettings completed across 21% of the portfolio resulted in a total annualised rental increase of 6.3%
  • Market reviews comprised 10% of the total annualised rental and resulted in an increase of 11.5%
  • Comparable sales for the year to September up 11.5% at NorthWest Shopping Centre & 4.0% at Silverdale Centre
  • Net property portfolio valuation gain of $23.6 million, or 2.7%, to $934.5 million ($902.2 million)

Developments, acquisitions & divestments:

  • East Tamaki, 11 Springs Rd, construction of a new head office for Waste Management NZ Ltd, practical completion expected late 2019
  • Tauranga, Bay Central Shopping Centre, $4.7 million expansion for Rebel Sports & Briscoes premises, new 10-year leases
  • 3 Kings, 2 Carr Rd, post-balance date, $6 million upgrade of Bunnings premises in early stages of development
  • Avondale, 439 Rosebank Rd, unconditional contract signed to buy property for $8 million, completion expected July 2020
  • Albany, 33 Corinthian Drive, ASB technology & innovation hub, sale process started post-balance date

Earlier stories:
12 September 2018: Stride outlines plans for commercial property funds
6 May 2018: Stride’s Springs Rd redevelopment for Waste Management goes unconditional
26 March 2018: Investore settles 2 property sales
2 March 2018: Stride’s 3-property sale to Investore settles

Attribution: Company release.

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Stride outlines plans for commercial property funds

Philip Littlewood.

Published 31 August 2018
Stride Property Group chief executive Philip Littlewood outlined yesterday how the group’s investment management arm intends to develop its business for the long term.

The NZX-listed Stride’s business is based on property ownership, but it wants to grow the investment management side of the business through commercial property funds.

It manages the Investore Property Ltd bulk retail portfolio and the Diversified NZ Property Trust, and lifted earnings from that side of the business 12% more than forecast in the June 2018 year.

Mr Littlewood told shareholders at the group’s annual meeting in Auckland yesterday: “Over time we will seek to establish a group of commercial property funds to provide the opportunity for further growth in our investment management business.

“We will seek to use Stride Property’s balance sheet to acquire properties that will ultimately be used to establish these new focused funds, with Stride Property co-investing in any new fund, providing alignment of interest between Stride & investors.

“Stride will also seek to leverage the inhouse development capability of Stride Investment Management Ltd to identify & undertake new developments to deliver the strong investment returns we require.

“We also believe there is latent growth opportunity within the portfolios currently managed by Stride Investment Management. In particular, the Diversified portfolio includes Queensgate Shopping Centre, with the rebuild yet to be completed following the Kaikoura earthquake.

“There are also some further portfolio initiatives that are currently in the advanced planning stage within the Diversified portfolio which, if they proceed, will provide additional opportunity for Stride Investment Management.

“This type of growth is indicative of the leveraged investment management model we see for Stride, where, as we establish further products, Stride will incrementally benefit as each of our products performs & grows. Our primary focus is to make sure that we deliver on the plan we set out to investors at fund establishment. We are setting Stride up for a sustainable investment management business which creates long-term value for our investors.”

Attribution: Annual meeting address.

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Stride’s Springs Rd redevelopment for Waste Management goes unconditional

Stride Property Ltd said on Friday its East Tamaki redevelopment project with Waste Management NZ Ltd (Waste Management) had gone unconditional after resource consent was granted & Overseas Investment Office approval received.

The project involves redeveloping Stride’s 5.2ha industrial site at 11 Springs Rd, East Tamaki, previously leased to Lion Brewery Ltd as a bottling facility. That lease expired last September.

Stride will demolish existing site structures to make way for a purpose-built 8285m² industrial facility occupying the entire site.

It will provide comprehensive logistics & operational facilities for Waste Management to service the Auckland market & oversee its national operations.

Stride said when it announced the proposed deal in November it expected to complete the redevelopment in the September 2019 quarter. On completion, Waste Management will commit to an initial 25-year lease, delivering initial net rental of $3.89 million/year & structured rental growth.

The development is forecast to cost $43 million, and the agreement allows for the expansion of the scope of works by up to $23 million, with an associated increase in rental.

Attribution: Stride release.

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Investore settles 2 property sales

Investore Property Ltd settled 2 property sales worth $32.6 million last week.

They were on the disposal side of the deal the NZX-listed supermarket & bulk retail investor made with Stride Property Ltd (which manages Investore’s portfolio) to buy 3 Bunnings properties from Stride for $78.5 million. Stride established Investore out of a division of its own business and added a portfolio of Countdown supermarkets to list it in 2016.

Investore settled the $11.1 million sale of the Fresh Choice supermarket at 64 Gorge Rd, Queenstown, early last week, and followed that on Friday with the settlement of its $21.5 million sale of the Countdown supermarket at 17 Chappie Place, Hornby, Christchurch.

Earlier stories:
5 March 2018: Investore sells Hornby supermarket property
2 March 2018: Stride’s 3-property sale to Investore settles
9 February 2018: Investore confirms 3-shop buy from Stride, and signs a sale
13 July 2016: Stride stapled securities & Investore start trading

Attribution: Company release.

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Stride’s 3-property sale to Investore settles

Stride Property Ltd’s $78.5 million sale to Investore Property Ltd of 3 Bunnings properties in Hamilton, Rotorua & Palmerston North settled on Wednesday after Investore shareholders voted on 9 February to approve the deal.

Earlier stories:
9 February 2018: Investore confirms 3-shop buy from Stride, and signs a sale
13 July 2016: Stride stapled securities & Investore start trading

Attribution: Company releases.

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Investore confirms 3-shop buy from Stride, and signs a sale

Stride Property Ltd said yesterday its sale of 3 Bunnings properties at Hamilton, Rotorua & Palmerston North to Investore Property Ltd for a total $78.5 million was unconditional. It expected settlement to occur on 28 February.

99.9% of Investore shareholders’ votes at yesterday’s meeting to approve the purchase were in favour.

Investore said in November it intended to dispose of 3 properties to buy the 3 Bunnings properties, to provide balance sheet capacity for future activities.

Yesterday, Investore said it had agreed to sell the Fresh Choice supermarket at 64 Gorge Rd, Queenstown, for $11.1 million, representing a 4.8% initial yield based on the most recently reported rental as at 31 March 2017 and a 12% premium to the property’s value of $9.9 million in Investore’s 30 September 2017 accounts. The sale is unconditional and settlement is scheduled for 20 March.

Stride established Investore out of a division of its own business and added a portfolio of Countdown supermarkets to list it in 2016. The forward investment strategy was to continue to acquire large format retail properties, a segment of the market identified as offering unique investment attributes.

Earlier story:
15 November 2017: Stride revives plan to sell 3 Bunnings store to Investore amid other capital management initiatives

Attribution: Stride & Investore releases.

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Stride defers NorthWest 2 option expiry at Gunton’s request

Stride Property Ltd said today it had agreed to defer the expiry date of Westgate Town Centre Ltd (Mark Gunton)’s 3-year option to acquire Stride’s NorthWest 2 development.

The option was due to expire on Tuesday, 19 December, but will be extended to a date in the new year which depends on the outcome of Stride’s discussions with Mr Gunton.

Stride developed NorthWest 2 alongside the NorthWest Shopping Centre at Westgate, at what was then the top of Auckland’s North-western Motorway.

Stride chair Tim Storey said the company undertook the development after Westgate Town Centre Ltd granted Stride a conditional right & ground lease for the NorthWest 2 site. Under the agreement, Stride granted Westgate Town Centre Ltd rights allowing it to acquire the development from Stride within 3 years of the ground lease’s effective date (the deadline being Tuesday), at a price equal to 115% of Stride’s total development cost (including holding costs).

In the event that Westgate Town Centre Ltd didn’t acquire the development within the 3-year period, the agreement also permits Stride to obtain freehold title to the land for a nominal $1. In its accounts to 30 September, Stride held the NorthWest 2 development in the consolidated interim financial statements at $36.3 million.

Link: Stride interim report to 30 September 2017 (see accounts page 30, note 11 re NorthWest 2)

Earlier stories:
5 October 2015: Albany settlement helps Stride’s Westgate programme
30 September 2015: Westgate opens for business tomorrow
24 July 2015: DNZ looks to grow investment management as first Westgate project nears completion
11 February 2015: DNZ puts next property on market as NorthWest mall leasing hits 90%

Attribution: Stride release, interim report.

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Stride revives plan to sell 3 Bunnings store to Investore amid other capital management initiatives

Investore Property Ltd and its creator & asset manager, Stride Property Ltd, engaged in some transactions this week which will see Investore buy 3 Bunnings properties from Stride, along with a number of other capital management issues.

Stride intended to sell the 3 properties to Investore when Investore listed last year, but didn’t get lease agreement in time. The new proposal requires Investore shareholder approval, but a meeting date hasn’t been set yet.

Investore is to buy 3 Bunnings properties at Hamilton, Rotorua & Palmerston North from Stride for $78.5 million at an initial yield of 6.13%, with structured growth of fixed 2.5%/year rental uplift.

Investore’s board is also exploring a possible share buyback & bond offering, and said its guidance of 7.46c/share cash dividend for the 2018 financial year was unchanged.

Stride established Investore out of a division of its own business and added a portfolio of Countdown supermarkets to list it in 2016. The forward investment strategy was to continue to acquire large format retail properties, a segment of the market identified as offering unique investment attributes.

“With this investment mandate clearly established, the board’s focus has been to look for further opportunities to expand Investore’s portfolio and to enhance shareholder returns by optimising capital structure. Investore believes the combination of the proposed acquisition, the capital management initiatives being considered, which include options around the implementation of a share buyback scheme & a bond issue, and repositioning of the portfolio, delivers on this strategy.”

Investore signalled in its 2016 initial public offering product disclosure statement that Stride had intended to transfer its remaining large format retail properties to Investore. However, Stride retained ownership of the identified assets because the terms of transfer couldn’t be agreed with the tenant, Bunnings Ltd, within the timeframe required to align a divestment with the timing of the Investore IPO.

As a material transaction under NZX listing rules concerning related parties, the transaction requires Investore shareholder approval. A meeting date hasn’t been set yet, but the board hopes to get approval for settlement to be concluded by 28 February. It’s engaged Northington Partners Ltd to prepare an independent appraisal report.

Independent Investore directors Mike Allen & Kate Healy managed the sale & purchase agreement negotiation with the Stride board and received independent valuations from Jones Lang LaSalle which supported the $78.5 million acquisition price.

Investore’s board said the acquisition of this Bunnings portfolio would diversify the tenant mix, reducing the Countdown concentration from 81% (as at 30 September 2017) to 73%, with Bunnings equating to 10% of the portfolio contract rental.

The board said the Bunnings’ portfolio would be leased on new 12-year lease terms and provide a higher proportion of structured growth into Investore’s portfolio, with a fixed 2.5%/year rental uplift. Net rent under the new lease starts at $4.81 million/year.

Following settlement of these properties, Investore’s bank loan:value ratio (LVR) is expected to increase from 39% to 46%. The board said: “Although this is below the targeted maximum LVR ratio of 48%, Investore is planning on disposing up to 3 properties to provide balance sheet capacity for future activities, including capital expenditure works, and is exploring the options around the implementation of a potential share buyback scheme. In addition, the board is also considering a bond issue.”

Bunnings retains the right to acquire the properties at year 48 of the lease, on the assumption that a new 6-year lease term is in place.

As a part of the 3 lease restructures, Stride will pay Bunnings $18 million on termination of the old leases & commencement of the new leases, implying a net cost to Stride of $13 million post-tax deductibility. As the payment is a component of investment property, it’s not expected to materially affect Stride’s distributable profit for the year to March 2018.

Stride has retained its other Bunnings property, at Carr Rd, Mt Roskill, where Bunnings has signalled its intent to carry out works within the next 12 months. Subsequent to these works, and subject to changes in the market or other portfolio commitments, Stride said it expected to put this asset on the market at the end of 2018.

Stride chair Tim Storey said the Stride board had reviewed its strategy on ownership of large format retail property and reaffirmed its view that interests in such assets should be held through Stride’s investment in Investore, or sold.

Attribution: Company releases.

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H&M to lead retail revival at Queensgate

Swedish fashion & homegoods retailer H&M will open its third New Zealand store in October, leading in to the return & arrival of a large number of other retailers at the quake-hit Queensgate Shopping Centre in Lower Hutt.

Kiwi Property Group Ltd brought the Swedish listed company, H & M Hennes & Mauritz AB, to New Zealand first, opening an H&M store at its Sylvia Park shopping centre in Auckland a year ago. Philip Carter’s The Crossing development in Christchurch, which incorporates offices and food & beverage outlets in a precinct which combines new & restored heritage buildings, opened the second H&M this month.

Queensgate, managed by Stride Investment Management Ltd for the Diversified NZ Property Trust, will open its H&M on Thursday 26 October, in 2700m2 on 2 levels in the Centre Court.

The Diversified trust bought the former Westfield mall from Scentre Group (NZ) Ltd in August 2016. Part of it was closed after the Kaikoura earthquake in November and a portion of the carpark & its cinema complex were demolished. After a partial reopening, the centre was fully reopened in April.

Stride shopping centres general manager Roy Stansfield said on Wednesday the company was also readying sites at Queensgate for other new stores and stores that were returning, relocating & upgrading: “We expect many of these to be completed before the busy Christmas period. These include Skechers, Bed Bath N Table, Health 2000, Portmans, Merchant, Bed Bath & Beyond and Boost Juice.

Earlier story:
9 July 2017: H&M to open at Queensgate

Attribution: Stride release.

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