Countdown seeking investment partner
Woolworths is seeking an investment partner to help fund its proposed new distribution centre at Rolleston on the outskirts of Christchurch in what will be Canterbury’s biggest ever industrial offering.
The $60 million state-of-the-art build will begin shortly and is scheduled for completion in the middle of next year. It will provide the Countdown network with a purpose-built distribution facility for its fresh and perishable product lines.
Sam Staite, director of industrial at Colliers Christchurch, says Woolworths is looking for a long-term partner for an initial sale and leaseback of the Christchurch Fresh Distribution Centre spanning 15 years.
“Rather than trying to sell the asset at the highest possible value, Woolworths wants to have only the actual costs funded by the buyer with a focus on the return rate and, therefore, occupancy cost being as low as possible,” Staite says.
“This prime asset offers everything the investment market is looking for: tenant strength, scale, brand new improvements, low site coverage on freehold land and all situated within a prime, high-growth location close to two inland ports and less than 10 minutes to New Zealand’s second largest centre and the South Island’s main export hub, Christchurch.
“Institutional investment grade assets of this scale rarely become available in the New Zealand market, but on offer here is exactly that. The development is well through its design process.”
The offer is by deadline private treaty, closing February 24.
Staite says the driver for Woolworths is to secure a development partner who will provide the capital to fund this project from start to finish at the open-book development cost. Woolworths will partner with the most suitable buyer who will provide them with the lowest return rate on the total development cost.
He is expecting strong national and international interest in the distribution centre, located in Ngai Tahu Property's industrial park of Tawhiri in Rolleston.
The 30ha Tawhiri development, directly adjacent to the sought-after 180ha Izone Business Hub, links from Izone via Hynds Drive with the main entrance to the park coming from Hoskyns Rd. The region’s two inland ports are housed in Izone and nearby Iport.
“During recent years, national investors have shown a keen interest in the Christchurch industrial market with demand across the board on the back of continuing high prices,” Staite says.
“All areas are performing strongly, lease terms are getting longer, and rental rates are finally showing signs of starting to rise after 10 years of being stagnant, which continues to provide the returns investors are seeking.”
Low site coverage of about 40 per cent provides excellent long-term expansion possibilities and also offers large car parking areas, efficient large vehicle circulation, and vast yard areas for container laydown and crossdocking.