Land and buildings in prime location
Land and buildings leased to Countdown supermarket and two smaller retailers at a major Tauranga shopping centre are for sale.
Located on around 0.5ha of land in the Fraser Cove shopping centre, the property generates net annual rental income of $1,244,711. It is being sold by deadline private treaty closing on October 24, unless sold earlier.
Bayleys agents Peter Gorton, Mark Walton and Mike Houlker are marketing the property. Gorton says Countdown has been an anchor tenant since 2009 and has recently extended its lease.
“The vendor and the tenant, Woolworths NZ, have agreed to an extension on the lease until 2028, with two rights of renewal, which if exercised would take its occupation through until 2044,” he said.
Woolworths NZ is one of the country’s two large supermarket groups and is the wholly owned subsidiary of Australian public company, Woolworths Ltd, which has a market capitalisation of over $A60 billion (NZ$64.5b).
The larger of the two adjoining retail tenancies in the sale is Ajays Emporium, which has been in occupation since November 2017. The other tenancy is recently leased and undergoing fitout for a health supplements store.
Gorton says the three tenancies have a weighted average lease term (WALT) of around 7.8 years. The supermarket lease generates about 80 per cent of the total rental income. Its rent is reviewed every three years based on turnover, while the other two leases have fixed annual increases of 2.0 and 2.5 per cent.
“The exterior of the Countdown property has recently been repainted and internally a pharmacy has been added to further enhance its appeal.”
Mark Walton, Bayleys Tauranga’s commercial manager, says the property’s prime location in the shopping centre, opposite one of its two main entranceways off Fraser St, means it has high exposure to passing traffic and the centre’s customer base.
Fraser Cove was developed in 2002 by the New Zealand Retail Property Group (NZRPG), developers of the Westgate Centre in Auckland.
It had an initial net lettable area of about 19,000sq m and The Warehouse as its anchor tenant.
“It has subsequently expanded substantially into a 32,500 sq m retail and community hub with a variety of food and beverage outlets, a gymnasium and a range of speciality and large format retail stores,” says Walton.
“As befits its coastal location, Fraser Cove has a beach-like feel, with brightly coloured paved pathways and palm trees winding through its carpark, where over 1000 free parking spaces are a major attraction.
“Excellent transport links, including easy motorway access and nearby bus stops, means it’s highly accessible to a wide customer base.”
The shopping centre is also home to Warehouse Stationery, Kathmandu, North Beach, Bed, Bath & Beyond, Big Save Furniture, Godfreys, Babycity, Toyworld and Repco. Longstanding food and beverage tenants include the World’s End bar and restaurant and Burger King.
Walton says the centre is positioned between the central city and residential suburbs of Tauranga South.
“This is a well located asset in the heart of one of New Zealand's strongest and fastest growing regional economies — Tauranga’s population numbers are up over 10 per cent in the past four years.”