Investors wooed to food
Investore is adopting a sell and leaseback strategy as it rebalances its portfolio. Julie Iles reports.
NZX-listed commercial property fund Investore Property is in the process of selling some of its supermarkets in favour of Bunnings stores.
The company, which owns a string of Countdown sites, has announced it is selling two of the chain’s largest South Island locations.
The properties for sale, in South Dunedin and Christchurch, have a combined rateable value of $22.7 million in 2016.
Investore Property said in November it planned to dispose of three properties to balance its proposed acquisition of three Bunnings properties from its managing company, Stride Property Group.
Its sale of the Fresh Choice supermarket on Gorge Rd in Queenstown for $11.1m earlier this week was part of that plan.
Countdown Hornby in Christchurch and Countdown South Dunedin were built in 2010 and 2012 respectively and are subject to 20-year leases to Countdown’s holding company General Distributors.
Both leases run through until 2032, with several rights of renewals, which take the potential end lease out to 2072.
Countdown Hornby sits on a 17,655 square metre site at 17 Chappie Pl, most of which is used as parking space. It pays $1.36m in rent plus GST a year.
The South Dunedin store is located at 323 Andersons Bay Rd and pays $1.23m in rent plus GST a year. It is a smaller package, sitting on 10,298sqm.
The two are part of Countdown’s 184 supermarkets operated nationwide.
Bayleys sales project manager Mike Houlker said the two properties could be tendered individually or as a combined lot and had some of the longest tenancy agreements structured in New Zealand.
He said the Christchurch commercial space would be a rarity in the city, which had a ‘‘huge residential shift west after the Christchurch earthquakes’’ and ‘‘virtually no vacancies for large commercial land or tenancies’’.
The Hornby site also has 934sqm of warehousing and storage space and shares 295 car parks..
The South Dunedin Countdown is industrially zoned and gets traffic travelling to the city centre.
Houlker said Progressive Enterprises, the Australian parent company of Countdown, was ‘‘very strict’’ on the location, build and layout of their stores.
‘‘The highly technical framework for locating and constructing its outlets is based on strategic and incredibly researched demographic and geospacial trends and patterns which are then combined with sophisticated retail consumer habits.’’
‘‘Consequently, the properties they lease ... are consistently among the grocery sector’s best performing real estate assets.’’