One of Auckland's longest established shopping centres, the Pakuranga Plaza, is up for sale offering a new owner a substantial cash flow from close to 100 tenants as well as significant development potential from a probable future zoning change.
Located on a high profile site of just under four hectares on the corner of Pakuranga Rd and Ti Rakau Drive in East Auckland, Pakuranga Plaza comprises a mixture of retail and office space with a gross lettable area of 29,541sq m that has the potential to generate net annual income of about $8.3 million. The retail component of the Plaza is anchored by Farmers, The Warehouse and Countdown.
The property is being offered for sale by Ladstone Holdings which purchased it off Australian based shopping centre giant Westfield in late 2012.
"We have spent the last 18 months or so rejuvenating, repositioning and rebranding the centre as Pakuranga Plaza," says Kim Bennett, chief executive of Ladstone Holdings.
"Our decision to sell is in line with our previous commercial investments over the past 25 years where we upgrade our properties, add value and then move on to invest in our next project."
Bayleys Real Estate has been appointed to market Pakuranga Plaza which is being offered for sale by international tender, closing on October 29 through David Bayley, James Chan and Chris Bayley.
The property consists of the three main components:
The main enclosed shopping mall which has a Farmers Department store and a Countdown supermarket at either end and a mix of other national, international and local retailers in between, plus the four-level Plaza Tower which accommodates a number of office tenants;
The Warehouse Plaza, which is anchored by The Warehouse and also incorporates speciality strip retailers; and
The standalone Plaza Business Centre which is anchored by ANZ Bank and also contains some office tenancies.
David Bayley, executive director of Bayleys Real Estate, says the vendor's preference is to sell the property in its entirety but separate tenders for one or more of the three component parts would also be considered.
"This offering provides a rare opportunity to purchase a substantial shopping mall which has a strong cash flow and where the hard work in terms of refurbishing and reinvigorating the centre has been done," says Bayley. "However, there is also a huge opportunity to unlock further value from the property in the medium term through more intensive development under a mixed-use Town Centre zoning that is proposed under the new Auckland Unitary Plan."
The property is currently zoned Business 2 (Suburban Centres) which permits a broad range of activities including retail, office and community services. Under the proposed Auckland Council Unitary Plan, which is to supersede the current planning regulations, the property's Town Centre zoning allows for a wider range of development including residential and leisure activities. In particular, the zoning encourages higher density residential living with buildings of up to 12 storeys permitted.
David Bayley says Ladstone Holdings has commissioned concept plans which illustrate a possible staged development scenario which includes five 10- to 12-storey apartment buildings positioned on top of existing retail buildings and on the northeastern corner of the site, which could provide up to 1000 apartments.
Originally opened in 1965 as the AMP-owned Pakuranga Town Centre, the mall was one of the first large shopping centres in New Zealand, incorporating Farmers and George Court department stores.
The mall has been transformed several times since it was first built and retains little of its 1960s open-air appearance.
For a long time Pakuranga Plaza was the largest shopping centre in east Auckland, servicing customers as far away as Remuera, St Heliers and beyond. Westfield purchased the Plaza in 1997 and it was renamed Westfield Pakuranga.
The shopping centre currently has over 80 stores and, in addition to its major anchor tenants, has a number of national and global retail brands such as Whitcoulls, Amazon, Max, Cotton On, Life Pharmacy, Michael Hill Jeweller, Pascoes, Stevens, Specsavers, Bed Bath & Beyond, Hannahs and Vodafone. A Foodcourt with 10 outlets is anchored by Burger King and St Pierre's Sushi.
The centre is also a business hub with the Plaza Tower's office space occupied by a variety of local businesses.
The Plaza also includes community amenities such as Howick Local Board and Plunket premises; and the Pakuranga Library adjoins the Warehouse Plaza retail strip. On Saturday nights, the car park under The Warehouse is home to the Auckland Night Markets which draws up to 6000 people most weekends.
Pakuranga Plaza has extensive road frontage to Ti Rakau Drive and Pakuranga Rd, two of the area's main arterial roads, as well as Reeves Rd. Another public road, Aylesbury St, runs through the centre between the main mall and The Warehouse Plaza's specialty retailers, allowing parking directly outside shops. It is estimated the Pakuranga Plaza hosts five million visitors a year.
Bennett says Ladstone undertook a substantial amount of community consultation after it took over ownership of the mall. "The thing that came through most strongly was that people wanted a local shopping centre that identified strongly with what was happening in Pakuranga and Howick.
"So we've endeavoured to differentiate Pakuranga Plaza from the big, less personal regional shopping centres and repositioned and rebranded it to give it more of a local flavour, particularly in terms of the marketing that is undertaken.
"The Plaza services a big catchment area, similar to the size of a city like Dunedin, and an important focus has been on improving what it offers surrounding residents through initiatives such as community and sporting sponsorships, market days, competitions, seasonal events and promotions."
Bennett says extensive refurbishment and upgrading work has been undertaken on both the exterior and the interior of the buildings, much of it at night time when the Plaza is closed to the public.
This has included repainting and retiling work, a new entrance and frontage, with new branding and profiling, replacing many of the retail facades as well as refurbishing office space in the Plaza Tower.
"We've also built up a very strong seven-person management and marketing team, which includes some of the previous management team who were passionate about the Plaza and the area and wanted to stay on. So a new owner would benefit from the comprehensive management systems that have been established and which are administered by a dedicated and experienced team."
Chris Bayley says Pakuranga Plaza's primary catchment area's population is forecast to grow by 31 per cent over the next decade, driving demand for increased amenities and more intensive residential development.
"Auckland Council has identified Pakuranga as a town which, over the course of the next 30 years, can accommodate population and business growth and it is developing a master plan to make Pakuranga an even more vibrant town," he says.
"The plan recognises that while the town cannot grow out in size it can grow up in quantity, quality and market attractiveness."
He says the development of the area is being supported by significant improvements in the area's transport infrastructure, primarily through the Auckland Manukau Eastern Transport Initiative (Ameti).
This includes significant road network improvements and a new dedicated busway between Panmure Station and Pakuranga town centre as part of its next stage.