Countdown on for sale of Gisborne property
The freehold land and buildings occupied by one of the country’s most modern and bestperforming Countdown supermarkets are for sale, offering the investment market an opportunity to acquire a trophy asset.
The high-profile, new-format freestanding Countdown Gisborne supermarket at 109-115 Carnarvon St has three road frontages and opened in June 2021, replacing an existing Countdown on the same site and being 35 per cent larger than the original store.
There is 3859sq m of lettable space, including an industry-leading 2629sq m main trading area and a dedicated pick-up area for click-andcollect orders on a 1.28ha site with 205 carparks.
As the only Countdown supermarket in the Gisborne region, it services a growing catchment, with its delivery radius now extending to the East Coast settlements of Mahia, Wairoa, Te Karaka and Tolaga Bay.
Owned by the New Zealand subsidiary of ASX-listed Woolworths Ltd and with a new
10-year leaseback to General Distributors Ltd, trading as Countdown, the property returns an estimated net rental of $1.715 million a year plus GST and outgoings, with rights of renewal extending occupation until
2083.
The property includes a number of Countdown’s latest design, fitout and technology initiatives and is strongly focused on energy efficiency and emissions reduction. Sustainability measures include LED lighting and transcritical refrigeration to reduce energy outgoings.
Marketed by Ryan Johnson of Bayleys Auckland Central and Mike Florance of Bayleys Gisborne, the property is being sold by tender, closing 4pm, Wednesday March 8.
With supermarkets proving to be a soughtafter and defensive asset class trading exceptionally well during and post-pandemic, Johnson said astute buyers will be drawn to the investment grade tenant covenant to New Zealand’s largest supermarket brand and the longterm cashflow and tenure.
“There is capital circulating in the market seeking exactly this sort of premium, passive new-build asset with A-grade seismic credentials, and underpinned by long tenure and strong trading income to provide an inflation hedge. Those fundamentals are paramount for investors and lenders in the current lending environment.
“Given the scarcity of premium stock in the market for inter-generational and ultra-high net wealth acquisition, Countdown Gisborne provides a compelling opportunity – particularly in light of the replacement value for an asset such as this, and the fact that even with stronger fixed interest returns over the past six months, after-tax real returns are still in negative territory of around 3 per cent.”
Johnson understands the proceeds of the sale will be reinvested by Woolworths NZ into the company’s forward development pipeline.
Active in the Gisborne commercial and industrial market, Florance said it is very rare for investment-grade property to be available in Gisborne.
“Despite the well-performing regional economy, property assets over $10 million do not often hit the open market in Gisborne. There’s plenty of confidence being demonstrated in the broader commercial and industrial market with no evidence of value reduction, and the Countdown building would be the highest-value property – via an on-market campaign – that the city has seen.”
Florance said like many provincial areas in New Zealand, Gisborne residents are loyal and parochial and this flows through to its investor market.
“We’d expect this property offering to resonate with Gisborne and Hawke’s Bay commercial investors who are very committed to the East Coast, or those outside the area with some nostalgic connection to the region.
“The rural market is also actively diversifying outside of their agricultural/horticultural core business, yet wanting their dollars to remain within the region where they can drive past their asset and see it.”
With significant investment being shown in the region’s primary sector, Florance said Gisborne city is well-placed for growth in the economy, infrastructure and population.
“There’s a lot of strategic new housing development underway and planned for the city, with some sizeable subdivisions progressing.
“Local government infrastructure spending of circa $90 million was seen last year with a further circa $130 million proposed over the next calendar year, while central government’s Infrastructure Acceleration Fund recently provided $4.2 million of investment in key water supply, stormwater and roading upgrades on the eastern city fringe to help facilitate public, affordable and market housing.
“A recently completed Housing Business Assessment forecast Gisborne will need nearly 30 per cent more houses over the next 30 years, equating to approximately 5000 new homes.”
Projections show the Gisborne catchment areas could see a 50 per cent lift in supermarket and grocery spend between 2018-43.