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Essential investment: Buy one or both modern regional Countdowns

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Two modern Countdown supermarkets are for sale in the growing Taranaki and Otago regions, providing a chance to secure a significant stake in one of New Zealand’s most coveted asset classes.

The recently developed properties in Mosgiel and Stratford are offered for sale with new 10-year leasebacks to Countdown, providing secure long-term income backed by an essential services tenant.

Blair Peterken, Director of Colliers Capital Markets team, says supermarkets are undoubtedly one of the safest and most attractive investments available today.

“As the world continues to be impacted by Covid-19, supermarkets make for a counter-cyclical investment that allows investors to either hedge risk in an existing portfolio or provide a return on cash while maintaining a low risk profile.

“The properties for sale represent a rare chance to build a significant stake in this sought-after asset class, with the added security of a blue chip ASX-listed tenant.

“Both properties were recently developed and benefit from A-grade seismic ratings, high-profile locations, and dominance in the catchments within their respective markets.

“Whether purchased individually or together, this will undoubtedly be one of the most sought-after investment opportunities of 2021.”

Countdown Stratford opened in the growing Taranaki township in 2015. It has a gross lettable area of 2,893sqm on an 8,399sq m freehold site with 129 car parks.

Countdown Mosgiel opened in 2017 and benefits from being twice as large as the supermarket it replaced. It has a gross lettable area of 3,331sq m on a 12,124sq m site with 174 car parks.

Both properties are on new 10-year leases to Woolworths New Zealand Limited, a subsidiary of General Distributors Limited, trading as Countdown. Each lease has 10 rights of renewal of five years each, extending occupation through to 2081.

Countdown Stratford returns $705,000 plus GST in net annual rent (approx.), while Countdown Mosgiel returns $954,557 plus GST, (approx.).

Purchased together, the properties would return close to $1.659 million of geographically diversified income, split 45 to 55 per cent between the North and South Islands respectively.

Woolworths New Zealand has exclusively appointed Colliers to market the properties for sale by deadline private treaty closing at 4pm on Wednesday 10 March, unless one or both are sold earlier.

Peterken says investors will be attracted to the strength of tenant covenant.

“Woolworths New Zealand Limited is a subsidiary of Woolworths Group Limited – an ASX top-10 listed company that is the largest retail group in Australasia.

“The company owns and operates over 180 Countdown supermarkets throughout New Zealand and is the largest private sector employer in the country, with 21,400 staff. Countdown serves more than 3 million Kiwis a week and has traded as an essential service throughout Covid-19.”

Benet Carroll, Director of Colliers Taranaki, says Countdown Stratford has been a gamechanger for the community.

 “Countdown Stratford has brought significant economic opportunities to the community, employing nearly 100 staff as well as providing the region with a valuable essential service.”

Located at 21a/27 Broadway, Stratford, it is located within close proximity to the town centre and commands 90m of frontage to State Highway 3.

Built by awarding-winning Cleland’s Construction, it has an expansive ground floor retail area with amenities including a produce preparation area, cool room, grocery freezer, dairy cool room and grocery store. The first floor contains a staff area and plant rooms.

Stratford is a fast-growing township with some 10,000 residents, surrounded by some of the most productive rural land in New Zealand.

Its population grew by 1.4 per cent in the last year on the back of significant investment, including more than $13m from the government’s Provincial Growth Fund and $9.6m on the upgrade of SH43 into Stratford from the north.

Additional projects underway include a $20m multi-sport centre and a $7m sports and events park, both due for completion before 2023.

To accommodate the town’s projected population growth, Stratford District Council has undertaken and funded a significant subdivision of rural land into residential sections, which sold within weeks.

Stratford has also recorded the strongest growth in employment in the Taranaki region due to increases in public services, manufacturing, trades and business services.

Dean Collins, Director of Colliers Dunedin, says Countdown Mosgiel also benefits from a rapidly growing catchment.

“Mosgiel is a popular residential community located 20 minutes from Otago’s main centre of Dunedin. Its population has grown by 16 per cent between 2013 and 2020, with many former Dunedin residents and newcomers moving to the area due to the availability of land and the perceived better climate.

“The town has a population of some 14,600 residents and remains an important service centre for the surrounding farming communities and suburbs, including Outram, East and North Taieri and Fairfield.”

Located at 55 Gordon Road, Countdown Mosgiel occupies a prominent site on the town’s main road that was previously occupied by the former St Mary’s School.

The site benefits from dual street frontage, with 137m to Gordon Road and 100m to Church Street, and access via both.

Situated only 1km from the SH1 interchange, the property sits within an established residential area bordered by dwellings and close to the Mosgiel Medical Centre and the recently rebuilt BP Connect.

Peterken says both Countdown supermarkets represent an exciting opportunity to invest in regional New Zealand.

“As property yields continue to compress in Auckland, investors are increasingly looking to the provinces for better returns.

“These two Countdowns tick all the boxes with growth locations, long leases, strong tenant covenant, and a sought-after asset class. Add one or both to your cart today.”

Wanting to see more property in this region? See our full range of services for real estate in Dunedin delivered by our market-leading team. 


Related Experts

Blair Peterken

Director | Capital Markets

Auckland CBD

After more than a decade in Australia’s highly competitive commercial property sector, Blair joined Colliers International NZ as Director in the Capital Markets team in April 2017.

Specialising in the sale of larger commercial assets and mixed-use sites around New Zealand, Blair brings a high level of energy and diligence to the industry. His extensive knowledge and educational background ensures he is well-equipped in progressing and developing the Capital Markets team.

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Previous Experience

From 2014 – 2017, Blair was Director and Head of JLL’s South Sydney office where under his leadership, the company  grew from third to first in the South Sydney market in both leasing and sales. In 2015 he was the company’s highest fee earner across the Australian industrial business. Blair specialised in the sale and leasing of larger industrial and commercial assets including mixed-use development sites within the South Sydney market.

Prior to this he was Head of Industrial, South Sydney at CBRE. While at CBRE, Blair won the prestigious Circle of Excellence Award twice for his performances and was highest fee writer in the South Sydney office in 2012 and 2013.

Peterken’s top transaction while in Sydney  was the 2014 sale of a 4.9ha business park in Rosebery, South Sydney to Meriton Group  for A$190,000,000

His two biggest leases were the single largest leasing transactions in South Sydney in their respective years. In 2011, he leased a Goodman-developed, 12,400sq m warehouse and office in Mascot to logistics company Toll, and last year, he leased a Meriton-owned 22,000sq m site in Pagewood to WSI Logistics.

 

A selection of notable sale transactions:

  • Sale of St Kentigern Girls School, Remuera - $40,000,000 +
  • The General  Buildings, 29-33 Shortland Street, Auckland - $42,000,000
  • 110 Symonds Street, Auckland - $38,500,000
  • 1-55 Rothschild Ave, Rosebery - $190,000,000
  • Central Park Business Park,  Greenlane - $209,000,000
  • Bunnings Hamilton South - $25,100,000
  • The Warehouse, Blenheim - $16,380,000
  • NZI Centre, Auckland - $63,000,000
  • Royal Heights Shopping Centre, Auckland - $17,000,000
  • 75 Karangahape Road, Auckland - $23,300,000
  • 5 Nelson Street, Auckland - $9,000,000
  • 66-80 Broadway, Newmarket - $65,000,000

 

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Benet Carroll

Director

New Plymouth

Benet started his property career working as a research analyst in Auckland while he completed a degree in Property Valuation and Management. Following graduation, he joined Colliers International in Wellington as a commercial property valuer, specialising in investment analysis and industrial development projects.  In 2006, he moved into Industrial Sales and Leasing, becoming one of the leading brokers in the Seaview and Porirua industrial markets. 

In early 2018, Benet moved back to his home province of Taranaki to set up the Colliers International New Plymouth office. Specialising in investment sales, Benet has successfully sold some of the best properties to come to the market in this period, boasting a 70% share of sales priced between $2m and $3m.

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Dean Collins

Director | Commercial Broker

Dunedin

Specialising in commercial and industrial property since 2006, Dean’s local knowledge gives him an exclusive insight to one of New Zealand’s most tightly-held property markets and allows him to advocate on behalf of local and national clients for commercial and industrial properties of any size.

Following his studies at the University of Otago, Dean worked with an international property advisory company (DTZ), before joining the Colliers International team as a shareholder in 2009. From there he became an associate director of Colliers International in 2014, and then a Director in 2017.

In addition to his work at Colliers he is a committee member for the Property Council of New Zealand Otago chapter.

Having grown up locally, his familiarity with the region has enabled him to cultivate strong connections throughout the Otago and Southland regions that facilitate his ability to meet his clients’ respective needs. His areas of specialisation include sales and leasing of commercial, industrial and retail property, as well as developmental land sales.

As a broker he is results driven, with a track record to back it up, while the dynamism and enthusiasm he brings to his role have seen him quickly rise to become a leader in the regions property market. An avid outdoorsman, in his spare time Dean is a regular skier and mountain-biker.

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