The Countdown Dargaville in Northland.
The sale of four new North Island Countdown supermarkets is a big feature of Colliers International's fifth Colliers Portfolio publication launched this weekend.
The 60 page magazine, entitled My Shopping List, contains 39 listings encompassing all sectors of the commercial market including industrial, office, retail and hotel properties.
Another notable listing is the marketing of 48 Mixed Use units in a high quality 'live & work' development on Auckland's North Shore.
The geographical spread of the listings ranges from Dargaville in the north, to a 2 ha holiday park and retreat in Franz Josef on the South Island's West Coast.
The four supermarkets, owned and operated by Progressive Enterprises, are for sale exclusively through Colliers International and are being marketed by an international private treaty sale process closing on Thursday December 3.
The freehold properties are located in Dargaville, Auckland, Tauranga and Wellington and generate a passing income of nearly $5.4 million. Individual property rent rolls range from around $1.1 million to $1.5 million.
The portfolio has a combined net lettable area of 16,929 sq m, and is being offered to investors individually or together, with all the premises subject to 20 year leases.
Peter Herdson, national director of Colliers International's capital markets team, who is marketing the properties with agency colleagues in Auckland, Tauranga and Wellington offices, says the sale represents an exceptional chance for investors to immediately purchase a portfolio of substantial size in a highly sought after and strong property asset class.
"Supermarkets are popular due to their high profile sites being very well located within their chosen catchments. This also provides the potential for sound alternative uses of the properties well into the future."
Three of the four leases include eight rights of renewal of five years each, extending possible expiry dates out to 60 years. The current $5.4 million total passing income from the portfolio is subject to turnover based rent reviews.
"We anticipate wide interest from a range of buyers from private investors to family trusts and syndicators, through to onshore and offshore institutions," Herdson says.
John Green, a director in Colliers' capital markets team, says large scale investments like this with secured cash flow remain a key focus for domestic and international investors - especially with New Zealand's continuing strong economic fundamentals.
"A portfolio with a weighted average lease term of 20 years will prove very attractive to investors, particularly in this low interest rate environment," Green says.
"It offers an ideal, long-term, income-generating investment with recent Official Cash Rate [OCR] drops continuing to drive investor demand. With forecast drops in the OCR by the end of this year, investors will be attracted to the potential favourable debt-to-yield spread that this portfolio offers."
Countdown is New Zealand's largest private sector employer, with 18,000 staff. Founded in 1981, there are 181 Countdown supermarkets operating throughout New Zealand, serving more than 2.5 million customers each week.
Herdson says potential investors can take a high degree of confidence from a tenant that is ultimately owned by Woolworths Limited, Australia's largest supermarket chain with a turnover in excess of AUS$60 billion (circa NZ$ 63.3 billion) and a market capitalisation of AUS$35 billion (NZ$37 billion).
"The future financial security and performance of this investment opportunity is underscored by the market demand for food - which is one of life's necessities.
"The New Zealand real estate sector is also attracting record levels of offshore investor interest. Of the $5.2 billion of real estate transacted across the country last year, $2.9 billion was driven by international capital."
The individual supermarkets in the portfolio are:
1. The Countdown Dargaville at 125-129 Victoria St and 1-12 Gladstone Rd, Dargaville, in Northland, is a single level supermarket with a total land area of 14,882 sq m and a net lettable area of 3500 sq m. The property earns annual base rent of $1,118,000 plus GST million and includes mezzanine offices, staff amenities and a plant room. The supermarket sits on a prominent corner site at the intersection of Victoria St and Totara St but has its legal address at Gladstone Rd. Victoria St forms one of the main roads leading into Dargaville. Notable neighbouring brands include The Warehouse. Dargaville is a service centre town for the large surrounding rural area with the nearest competing city being Whangarei about a one hour's drive away.
2. The Countdown St Johns at 134 Felton Matthew Ave, St Johns, Auckland, is also single level supermarket with a total land area of 14,258 sq m and a net lettable area of 4293 sq m. The supermarket, with an annual base rent of $1,278,500 plus GST, includes mezzanine offices, staff amenities and a plant room. A Lotto shop is also located at the entrance on the southern side of the supermarket. The supermarket sits on a prominent corner site at the intersection of Felton Matthew Ave and Merton Rd. This major roundabout intersection is a key access point for traffic accessing the Tamaki Campus of the University of Auckland and the pocket of industrial activities centred on Morrin Rd and Hannigan Drive, and the residential and retail areas to the south and east. This supermarket is also situated within the Tamaki Regeneration area - a central government and council led housing initiative with a blueprint for up to 6,000 additional homes for the area.
3. The Countdown Bureta Park at 44 Bureta Rd, Tauranga is, likewise, a singlelevelsupermarket with a total land area of 16,778 sq m and a net lettable area of 5581 sq m, including specialties. Thesupermarket has an annual base rent of $1,134,000 plus GST. Included in the sale are six specialty retail premises at the front of the building with a potential net rental of $330,000. The supermarketis located inBureta Park thatforms partoftheOtumoetaipeninsula in Tauranga. Tauranga is the largest city in the Bay of Plenty and one of New Zealand's main centres for business and international trade. It hasone of the fastest growing population centres in the country, expanding 11 per cent between the 2006 and 2013 Census.
4. The Countdown Crofton Downs at 124 Churchill Drive is in the suburb of Crofton Downs just north of Johnsonville within the Wellington greater city area. Countdown Crofton Downs is described as "a new generation" supermarket completed in late 2013 and occupies a total land area of 11,013 sq m. With a net lettable area of 3555 sq m the property generates an annual base rent of $1,575,000 plus GST and encompasses four specialty retail premises at the front of the building which are included in the head lease to General Distributors. A small portion of the site along the eastern side of the property is subject to a ground lease to Kiwi Rail. This area allows for heavy vehicle access to the goods delivery and storeroom facilities. Mezzanine offices, staff amenities and the plant room are situated above the single level supermarket. The high profile site is close to many of Wellington's western and northern suburbs. Surrounding business brands include a Z Service Station and Mitre 10. Crofton Downs is only a 10 minute drive from Wellington's central business district.
