Herne Bay Countdown: ‘Room for more stores’

Auckland's wealthiest suburb is getting a new $40 million Countdown, and agents who brokered the deal say there's appetite for at least two more supermarkets in the area.

Ray White commercial directors Finn Hurst and Mike Hoeft negotiated the lease for the new Countdown Metro on the corner of Jervois Road and Kelmarna Avenue, in Herne Bay.

The 2342sqm site of the new supermarket is owned by Auckland property investor Ben Cook and developer Kurt Gibbons, through their joint company Kremlin Capital.

Kremlin had already started construction work on the supermarket for a November opening.

Hurst and Hoeft told OneRoof that supermarket operators were keen to extend their presence in Auckland’s inner west suburbs, from Grey Lynn to Herne Bay and Point Chevalier.

“We knew that both big supermarket chains are looking for sites the area,” Hoeft said.

“The site has historically been underutilised and will now see significant investment and activity which is pleasing to see for the Herne Bay community.

Cook and Gibbons had bought the site from private developers Mansons TCLM, which had plans to develop a five-storey apartment and retail block.

“Ben and Kurt know retail developments as well as residential. So, when they bought [the site] we had a chat and asked ‘would you consider a supermarket?’,” Hoeft said. “There’s still room for another two stores in the area, but there are no sites available.”

The leasing deal with Countdown went unconditional just before Christmas.

Hurst, who with Hoeft, specialises in large format retail, said the appeal of supermarkets was that, unlike other retail, hospitality and even office, they continued to trade well through Covid lockdowns.

“Investors now have an intense focus on quality tenant covenant, and supermarkets fit that: good corporates who take long leases, generally ranging from eight years and upwards with rights of renewal,” he said.

“The yield compression reflects the value that buyers place on supermarket assets.”