Regional assets or those in less desirable locations have had a particularly tough time as well, he says.
"It will have been a difficult period for the tenants of this property, so occupancy levels and rental growth will have been impacted over the period, and with interest rates having risen sharply over the past 12 months, that will have put downward pressure on the valuation as well," he said.
Oliver Mander, NZ Shareholders Association chief executive, said Kiwi had signalled for some time it wanted to sell Northlands.
"They will no doubt feel that capital is now freed up and the recycling of capital into assets that have better longer-term returns will ensure a better return to shareholders. That's been well signalled so investors can make their own decisions.
"In terms of valuation, that is interesting. The discount to the valuation in the accounts - essentially the accounting rules require Kiwi to obtain independent valuations on their assets. That's to prevent a company from valuing assets themselves and recording a value very much in their interests.
"In this case, the sale price was short of the valuation. But the fact that the share price has not significantly altered this week would indicate shareholders actually expected this and had factored that difference into their expectations. It's no surprise to the market."
Mander said it showed investors still need to be very conscious of valuations of assets that are sitting inside a company's accounts, particularly a property company.
Rohan Koreman-Smit at Forsyth Barr wasn't surprised about the price.
"It's not unexpected. It's been known for a long time that Kiwi wanted to sell it. The valuation on that property has been marked down due to earthquake issues. We're in quite a different environment from that of 2019 or when we last had visibility on the asset value in 2020."
By March 31, 2020, Northlands was on the accounts at only $195m. Company updates since then talked to earthquake issues impacting asset values, with the $32m of unspent earthquake insurance proceeds from Northlands broadly bridging the $160m sale price and the March 2020 valuation, he said.
In the 2021 update, Kiwi announced retail properties held for sale were valued at $347.5m. These were a Palmerston North mall, Northlands and 50 per cent of a Hamilton mall. Those three assets were previously collectively valued at $402m the year before, he said.
Others said it was disappointing to see the market's view of retail assets and confidence in the outlook for some retail assets has declined so much.
The Palms sold last November at an 8.5 per cent cap rate. Eastgate was broadly the same for when Asset Plus agreed its sale.
Northlands has more than 100 tenants and 93 per cent of those are national branded businesses.
It produces around $19.4m annual income and has a gross lettable area of 45,380sq m.
Countdown, Hoyts, Farmers, The Warehouse and Chemist Warehouse are large anchor tenants in one of the South Island's largest retail centres.
Northlands was built in 1967 but Countdown and The Warehouse arriving in 2004 meant it was massively expanded to fit those large stores. It has 1663 car parks and is on a 92,000sq m site in one of the city's wealthier areas.
