Z Energy sales fuel up investors

Z Energy's property at 15th Ave is one of nine service station properties the company is putting on the market.

Properties in Tauranga, Rotorua, Opotiki, Ngatea, Paeroa, Te Aroha and Hawera, in the North Island, and Blenheim and Dunedin, in the South Island, will all be leased back by Z and will remain in the company's nationwide network under new leases. The operation of the sites and the associated businesses are not for sale.

Commercial, industrial and retail real estate firm Colliers International expects plenty of interest from individual investors, family trusts and property investment syndicates looking for easy-to-manage, income-generating investments.

Well known for the marlin sculpture which guards the entrance, the commercial-zoned Z 15th Ave corner site in Tauranga is expected to generate net annual rent of $119,000 on a new eight-year lease with further rights of renewal.

The Opotiki site will generate an estimated $48,000 in net annual rental income on a 12-year lease, with further rights of renewal. The Rotorua property is on busy Te Ngae Rd and is paying an initial net annual rent of $82,000 on a three-year lease, also with the right to renew.

The sites present an opportunity for investors to diversify into commercial property through investing in one or more smaller properties, backed by a national brand-name tenant, says Simon Clark of Colliers International.

"With Z committed to these sites and recently rebranding them as part of their nationwide brand roll-out, these properties provide income security for investors and offer income growth from regular fixed and market rent reviews," Mr Clark says.

The property sales are part of Z Energy's long-term plan to enable further investment in capital to support the growth of its core business, says Z's asset manager Gail Calder. The offering follows the successful sale and leaseback of several other Z service station properties earlier this year.

Owned 50/50 by Infratil and the New Zealand Superannuation Fund, Z Energy operates more than 300 service stations and truck stops nationwide, along with pipelines, fuel terminals and a share in the Marsden Point oil refinery.