Prime malls still sought after
Sales of shopping centres remain firm in spite of concerns about the impact of online shopping.
Some $600 million of retail properties changed hands last year, only 1.6 per cent higher than in 2017, with some of those considered ‘‘trophy’’ assets, according to a report by Colliers International.
Fewer shopping centres sold –
34 compared with 44 in 2017 – but those that did went for generally higher values.
The biggest deals were in Wellington and Christchurch, though
44 per cent by value of the sales were in Auckland, Colliers’ provisional data showed.
The largest was the sale of Porirua’s North City Shopping Centre for $100m to Adelaide’s Angaet Group, which is owned by Australian rich-lister Nick DiMauro. The vendor, Kiwi Property Group, is focusing more of its property business in Auckland.
The second biggest was in Christchurch. South City Shopping Centre was sold by local investor John Butterfield for $46m to another local investor, Terrence Stirling.
Notable sales in Auckland were Highbury Shopping Centre for
$40m, sold by the New Zealand Retail Property Group to the Strand Trust, and Mitre 10 in New Lynn for $29.3m.
Prime retail assets in New Zealand were still sought after and competition for them produced high prices, Colliers said.
But secondary retail catchments or property in lowerperforming catchments were ‘‘subject to a high level of scrutiny’’.
Recently Colliers struck a cautionary note about retail property. While bricks and mortar stores captured about 90 per cent of all retail sales, mounting competition online and off and more selective discretionary spending would make 2019 a challenging year for retail. That might result in a reassessment of retail property values, Colliers said.
But the amount of development taking place, particularly in Auckland, was at an all-time high.
‘‘The retail development pipeline has reached an all-time high this cycle, dominated by major shopping mall owners committed to a new development phase. It is estimated just under 180,000 square metres of retail space in Auckland will be added to supply in the coming years,’’ the report said.
The largest developments include the $790m redevelopment of Westfield Newmarket, which is owned by Australia’s Scentre Group and is due for completion at the end of 2019, and the $233m Galleria expansion of Sylvia Park Shopping Centre, owned by Kiwi Property.