Premier Auckland CBD Countdown supermarket for sale on Quay Street

Super CBD investment you can count on

Countdown’s premier Auckland CBD supermarket is for sale on a prime parcel of Quay Street land, with investors set to benefit from a new 15-year lease, impeccable tenant covenant and an extensive $10 million refurbishment plan.

The property is being offered to the market at a time of strong residential growth in the city centre, which is set to benefit greatly from the completion of the City Rail Link (CRL) in 2024.

Countdown Auckland City is strategically located only 500m from Britomart Transport Centre, which is being transformed into a two-way through-station that is key to the success of the CRL.

The property at 76 Quay Street is 100 per cent leased to Countdown, part of Australasian supermarket giant Woolworths Group, with a new lease that commenced yesterday.

The vendor and tenant have committed to a comprehensive store upgrade, which is set to reinforce the store’s position as one of New Zealand’s showcase supermarket assets.

Colliers International is proudly marketing the property for sale by way of international private treaty in conjunction with Australia’s Stonebridge Property Group.

Offers close at 4pm NZT on Wednesday 31 July.

Countdown Auckland City at 76 Quay Street

Peter Herdson, National Director of Capital Markets at Colliers, says this is an extremely rare opportunity to acquire a premium, freestanding supermarket in the heart of Auckland’s CBD.

“Countdown Auckland City is superbly positioned in a key downtown location that serves a dense, affluent and growing catchment of residents, workers and tourists.

“It occupies a prominent and rare CBD corner site with favourable zoning and excellent characteristics for long-term redevelopment and intensification.

“A lack of full-line supermarket alternatives in the area has made Countdown the go-to grocery shopping location for the wealthy surrounding catchment.

“The tenant attests that the store is one of the strongest performing supermarkets in the country, making it a very stable investment proposition.

“This exceptional income security is backed by the strongest tenant covenant you could ask for.

“Countdown is New Zealand’s leading supermarket brand and one of the country’s largest private employers, with more than 18,000 staff. Its 180 supermarkets and distribution centres serve over three million customers each week.

“Backed by this strong market position, Countdown Auckland City is arguably the best long-term, passive investment opportunity to come onto the market in the CBD this year.”

The property comprises a modern, purpose-designed supermarket with a net lettable area of 4,258sq m plus 182 undercroft parking spaces.

It is positioned on an 8,160sq m leasehold site on a 150-year ground lease to Ngāti Whātua o Ōrākei Maori Trust Board.

“The property presents a very simple and passive management proposition, with only a single tenant and the majority of outgoings, including the ground rent, billed directly to the tenant,” says Herdson.

General Distributors Limited, trading as Countdown, occupies the property on a predominantly net lease returning a base rent of $2,497,382 per annum.

Market rental reviews are every three years with a ratchet provision. Two rights of renewal of nine years each extend the final lease expiry to 2052.

The lease includes a commitment from the vendor and tenant to deliver a comprehensive modern refurbishment of the supermarket, including seismic upgrades. The estimated $10 million project is due for completion 2020.

Countdown Auckland City at 76 Quay Street

Hamish Doig of Colliers International says the lease also contains a redevelopment clause, allowing a new owner to consider long-term development opportunities.

“The property is zoned Quay Park Precinct, which allows for mixed-use development of up to 20m in height.

“There is scope to develop the site out to the title boundary, allowing for expansion of the supermarket or the addition of new specialty retail tenancies.

“A new owner could also look to build commercial, residential or hotel floors above the existing supermarket building.

“As such, multiple opportunities are available to enhance the value of the property or further develop this unique and undercapitalised site.”

The vendor has prepared indicative development concepts to respond to the likely future requirements of Countdown.

Alternative conceptual modelling has also been prepared for a mixed-use redevelopment.

The indicative plan shows a typical floor plate of 4,300sq m that would allow for 16,700sq m of A-grade office accommodation plus car parking.

Stonebridge Director Carl Molony says New Zealand’s favourable business environment is likely to drive strong offshore investor demand for this trophy retail offering.

“New Zealand’s strong, growing economy has made it one of the top investment locations in the world.

“The country has experienced positive economic growth for 33 of the last 35 years and benefits from low unemployment of only 4.2 per cent. It is ranked first in the world for ease of doing business and third in the world for tax efficiency.

“As New Zealand’s global city, Auckland is highly attractive to offshore investors. It is the country’s metropolitan and business capital and home to the vast bulk of multinational and national head offices.”

Molony says Auckland produces 42 per cent of New Zealand’s GDP and its city centre city is the largest and fastest growing employment area in the country.

Total jobs may increase by more than 75,800 by 2048, which is over a quarter of all employment growth in the region.

“Auckland continues to undergo significant urban renewal, with the development of Wynyard Quarter, the CRL and plans for light rail among some of the key projects.

“Auckland’s city centre has changed substantially over the past 10 to 15 years, as a result of significant public and private investment in infrastructure and development projects.

“There has also been substantial growth in the city centre resident population. There are now more than 80,000 people living in the city centre and fringe areas.

“The city and fringe populations are expected to increase by more than 58,400 people by 2048, with some 25,000 additional dwellings forecast to be built.

“All this demographic and business growth provides a superb customer base for a retail asset that is already trading exceptionally well.”

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