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The Warehouse Group has exited its joint venture in Te Rapa Hamilton shopping complex The Base two years early.

But a Red Sheds spokesman insisted the early exit from what has been called a "Stephen Tindall pet project" is not part of a wider rethink on its property holdings.

The Warehouse Group announced it had sold its interest in The Base complex to its partner Tainui Group Holdings for $37.4 million.

It will report an after-tax surplus on divestment of between $11.8 million and $12.4 million in the 2007 financial year. The Warehouse entered into a 50/50 joint venture in 2003 with the commercial arm of Waikato-Tainui to develop The Base, a 60,000sq m retail complex north of Hamilton.

Tainui Holdings chief executive Mike Pohio said the joint venture had been planned for a five-year term but the two parties had agreed The Warehouse would sell two years early.

Pohio said the Warehouse had provided retail experience and the complex - which yesterday was given resource consent for the development of a new mall - was trading well above expectations.

A spokesman for The Warehouse Group said: "As the development is now well advanced, The Warehouse has achieved what we wanted to achieve, which was supporting Tainui to develop a successful centre, and having a store trading in that centre.

"This has no implication for the group approach to property ownership and development."

Meanwhile, investors are watching closely any change within The Warehouse strategies amid confirmation that Woolworths Australia is appealing a Commerce Commission decision that it is not allowed to buy the company. Any change in strategy will be seen in the context of expectations that private equity firm Pacific Equity Partners, with or without Tindall and grocery firm Foodstuffs, may reignite a bid to privatise the company.

The Te Rapa complex has included a significant Warehouse operation that will house the next of the Warehouse Extra grocery offerings, but the sale will not affect the outlet.

Forsyth Barr analyst Guy Hallwright said that the early withdrawal was not a significant event in the scheme of things.

Hallwright said The Base joint venture had been a pet project for Tindall, The Warehouse Group's single largest shareholder.

Warehouse shares closed down 2c at $5.99 yesterday.