Auckland’s phenomenal economic and population growth is making large retail investments in the greater metropolitan area increasingly sought after.
But Colliers International capital markets director John Goddard says there simply aren’t enough quality sub-regional retail offerings to meet investor demand.
That shortage has made the likes of Hunters Plaza in Papatoetoe especially attractive to both local and overseas buyers, he says.
The large single-level complex at 217 Great South Road, which is on the market through Colliers International and Stonebridge Property Group, has recently undergone a significant refurbishment.
Goddard says it is expected to produce approximately $4.25 million of annual net income when fully leased.
“Investors want to capitalise on Auckland’s demographic boom, and they are looking for this type of high-profile, established retail asset with growth potential,” Goddard says.
“Hunters Plaza is at the heart of its community, and it dominates its primary catchment. Its two largest tenants – Australasian retailers Countdown and Kmart – draw in shoppers from Papatoetoe and beyond.
“It is well positioned to grow as its community does, and also offers plenty of opportunities for smart investors to develop the site to maximise returns.”
Stonebridge director Carl Molony says Auckland’s success story is key to the property’s appeal.
Auckland’s population grew by more than 110,000 between 2006 and 2013 – the equivalent of a city the size of Tauranga – and will increase a further 49 per cent, to 2.2 million, by 2043.
“That growth is already bringing benefits to suburbs like Papatoetoe, where density is starting to build in and around the town centre,” Molony says.
A trade area analysis by leading Australian property consultants Dimasi found the population served by Hunters Plaza was expected to grow from about 188,000 to 235,000 within 15 years.
Molony says the growing population is also spending more, due to a wealthier demographic emerging in the area.
“Retail spending by the population served by Hunters Plaza is forecast to increase from about $1.8 billion in 2016 to about $3.4 billion in 2031 – an average annual growth rate of 4.2 per cent,” Molony says.
Colliers International director John Green says residents want to spend that money where there’s a good mix of shops in a convenient location, and Hunters Plaza ticks all the boxes.
“The centre not only dominates its primary catchment – it also has excellent long-term tenants. From a convenience and quality point of view, there’s no substantial competition.”
Hunters Plaza is a fully enclosed 16,054sq m shopping complex on a high-profile, 28,817sq m freehold corner site in the town centre.
Located next to Papatoetoe’s main retail strip and sports and leisure centre, Green says it offers substantial parking for almost 700 vehicles, including about 521 covered basement spaces.
The surrounding area includes schools, retailers, banks and various food outlets.
Green says Hunters Plaza is well-served by public transport, and is only five minutes from the Southern Motorway and 15 minutes from Auckland International Airport.
The centre is anchored by the Countdown supermarket and Kmart department store, which are on new long-term leases. Both have been recently refurbished, resulting in outstanding turnover and traffic growth.
Hunters Plaza also comprises three mini majors, 45 speciality shops, eight kiosks and four ATMs, with a retail mix suitable to the trade area.
Hunters Plaza has recently been extensively refurbished including new travelators and a new floor throughout the centre.
Stonebridge director Philip Gartland says with the recent upgrades, investors could buy Hunters Plaza at well below its replacement cost.
“That makes it very attractive to overseas investors, especially with building costs in Auckland on the rise,” he says.
“There’s also the longer-term prospect of developing the site for mixed use under Auckland’s proposed Unitary Plan, including residential development of up to four stories in height.”
In 2014, the current owners commissioned a design concept for a five-level residential complex comprising 217 apartments.
While the concept would require a notified consent, Gartland says it shows the potential to develop the site into a high-quality mixed-use offering.
"Hunters Plaza is already a strong, standalone retail investment opportunity, and the development potential makes it even more desirable," Gartland says.
Hunters Plaza is being marketed by Colliers and Stonebridge under a joint exclusive agency to local and overseas buyers by international private treaty, with offers closing on Tuesday, March 21.