A large Countdown supermarket building on over 1ha of land in Hamilton's central business district has been put up for sale by NZX-listed property company DNZ Property Fund Ltd.
The 4880sq m building occupies a 13,646sq m site on the corner of Anglesea St and Liverpool St at the northern end of the CBD close to Waikato Stadium and adjacent to the major north-south and east-west routes through Hamilton. Also included in the sale is a 485sq m petrol station building in a prime corner position on the site which is subleased to Z Energy. The balance of the land comprises 277 car parks for Countdown customers.
The head lease over both buildings to Countdown's parent company, General Distributors Ltd, is producing current net annual rental income of $813,408 plus GST on a 20-year term which runs until early 2019. There are two further five-year rights of renewal which would take the lease through until January 2029.
DNZ Property Fund has appointed Jim McKinlay and Mike Houlker from Bayleys Real Estate to market the buildings, for sale by tender closing on August 28 with Bayleys' Hamilton office.
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Houlker says the sale forms part of DNZ Property Fund's rationalisation of its property portfolio and divestment of non-core assets.
"It presents an opportunity to secure a well-located property with a very strong tenancy profile at a high yield," he says. "The buildings only, and 928sq m of freehold land, are for sale as the balance of the land is held in two leasehold titles owned by another party," McKinlay says. "The Glasgow-styled ground leases provide for perpetual occupation of the fully developed site, meaning that the owner of the buildings has the right to renew the ground lease every 21 years, indefinitely."
Interest is still expected in this land because of the perpetual right to lease. "Also, the ground rent is paid by the tenant along with all of the buildings' operating expenses as part of the head lease."
The large format supermarket was purpose-built for the tenant and opened in 1998. It was extensively refurbished in 2012 with upgrades to the internal fit-out and exterior presentation. This was done as part of a rebranding of Countdown stores throughout New Zealand and was undertaken by the tenant. The building has an A Grade seismic rating and there are sprinklers and fire detection, heating and ventilation systems throughout.
The petrol station was added in 2008 and comprises underground fuel tanks, a reinforced concrete and asphalt forecourt and flooring with a canopy over the forecourt.
McKinlay says Countdown has two major stores in central Hamilton, as does rival Foodstuffs. "They each have a presence at the north and the south ends of an elongated CBD."
DNZ's diversified property portfolio was valued at $773.35 million at March 31, 2014. The Countdown property holding in Hamilton was valued at $7.1 million in DNZ's annual report for its March year.