Billion-dollar business a tenant in bulk retail centre

A bulk retail centre housing several publicly-listed companies is on offer in what is New Zealand’s fastest growing secondary urban area.
  

The Pukekohe Mega Centre, at 194 Manukau Road, Pukekohe accommodates seven retail tenancies, including Harvey Norman, Briscoes and Warehouse Group-owned retailer Noel Leeming.

Marketed by Jason Seymour, John Green and Peter Herdson of Colliers International, the freehold property will be sold by way of private treaty, with the deadline for offers closing 4pm on Wednesday 16 December, unless sold prior.

Seymour says the centre is underpinned by some of New Zealand’s most high profile national and international brand bulk retail tenants.

“Harvey Norman is an ASX 100 company with a market capitalisation of over A$4 billion, while the parent company of Noel Leeming, The Warehouse Group, has market capitalisation of over $900 million.

“Rebel Sport and Briscoes are part of the Briscoe Group, an NZX-listed company with 80 stores across New Zealand and a market capitalisation of approximately $600 million.”

The property boasts some long term rental income, with over 82% of income locked in until at least 2022, as well as 3,720 sqm of development land with potential for six more retail units in the future, Seymour says.

“The net lettable area of 10, 882 sqm generates a current rental income of $1.483 million, which provides investors with secure cash flow while they consider their options to expand the centre as the local population grows.

“Given the land shortages throughout Pukekohe, development opportunities such as this are rare.”

Herdson says the centre is likely to be New Zealand’s most significant bulk retail investment opportunity for 2015.

“With a huge, six-hectare land holding in New Zealand’s fastest growing secondary urban area (second-tier urban areas with populations between10,000 and 29,999), paired with exceptional investment security backed by several of New Zealand and Australia’s most successful retail organisations, this offering has all the makings of a secure, long-term investment.

“Pukekohe is identified in the Auckland Plan Development Strategy as a priority satellite town that is anticipated to grow to a population of 40,000 people by 2040 – nearly double its current population.”

Colliers’ Retail Director, Leroy Wolland, says investors can take confidence in the strength of covenant of the brands who have chosen this location.

“Harvey Norman, Noel Leeming, Rebel, Briscoes, and Godfreys have been successfully trading from the centre for several years, while Hunting and Fishing have recently signed up a new long term lease.”

Although separately owned, Mitre 10 Mega and Countdown also act as strong anchor tenants for the centre, Wolland says.

Tenants

Australian company Harvey Norman was established in 1982 and floated on the Australian stock market in 1987. The company now operates approximately 31 stores in New Zealand.

Rebel Sport and Briscoes are part of the Briscoe Group of companies, which also includes Living & Giving. The Group operates approximately 80 stores throughout New Zealand.

Noel Leeming boasts more than 80 stores throughout New Zealand. It was purchased by The Warehouse Group in 2012. The group had a turnover of $2.6 billion in FY14 and employs over 12,000 people.

Hunting & Fishing was started by Andy Tannock in Palmerston North in 1986. It has since expanded to include 37 stores throughout New Zealand.

Property

Built in 2007, the modern centre is constructed of a steel portal frame, a long run metal roof, reinforced concrete floors and external walls made of concrete tilt slab and incorporating retail glazing.

“The buildings provide high stud, bulk retail space with excellent car parking and tenant branding at the front and generous delivery access at the rear,” Herdson says.

There are 750 parking spaces on-site and vehicular entry to the centre is from Wrightson Way, which connects to Manukau Road in the west and Crosbie Road in the north.

Location

Green says the centre is approximately 1.2km south of the Pukekohe Town Centre and directly adjacent to Pukekohe Park, known internationally as motor racing circuit but is primarily a horse racing and training facility, incorporating a first-class function centre.

“It is situated in a high visibility position on the eastern side of Manukau Road, a street with a strong emphasis on bulk retail and other commercial uses.”

Pukekohe is a rural service town located at the southern edge of the Auckland region, approximately 50km from Auckland City, Green says.

“With a population of approximately 29,000 people it is the fastest growing secondary urban area in New Zealand.

“Census figures show area also has a higher media income and higher home ownership rates compared to the rest of Auckland, making it a firm and affluent base for local businesses.”

The rural divide between Pukekohe and Auckland City has narrowed considerably over the years because of the substantial expansion of both locations, Green says.

“Many are choosing to work from home in beautiful rural locations because of advances in communication technologies.”


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