The land and buildings of one of Tauranga’s major supermarkets is on the market with a recently extended lease to Countdown which has occupied it for the last decade.
Located on over half a hectare of land in the Fraser Cove shopping centre, the supermarket and two adjoining smaller retail tenancies, totalling close to 6,000 sq m, are for sale. The property is currently generating net annual rental income of $1,244,711.
One of the trophy listings in Bayleys’ latest Total Property portfolio, the offering is being sold by deadline private treaty closing on October 24, unless sold prior, through Bayleys’ Peter Gorton, Mark Walton and Mike Houlker.
Gorton says the Countdown Supermarket has been an anchor tenant of the Fraser Cove Shopping Centre since early 2009. “It’s obviously a location that is working for Countdown as the vendor and the tenant, Woolworths NZ, have recently agreed to an extension on the initial lease term for the supermarket through until 2028, with two rights of renewal which if exercised would take its occupation through until 2044.”
Woolworths NZ is one of the country’s two large supermarket groups and is the wholly owned subsidiary of Australian publicly listed company, Woolworths Limited which has a current market capitalisation of over AUD$60 billion.
The larger of the two adjoining retail tenancies also included in the sale is Ajays Emporium which has been in occupation since November 2017, with the other tenancy recently leased and undergoing fitout for a health supplements store.
Gorton says the three tenancies have a weighted average lease term (WALT) of around 7.8 years. The supermarket lease generates approximately 80 percent of the total rental income. Its rent is reviewed every three years based on turnover while the other two leases have fixed annual increases of 2.0 and 2.5 percent.
“The exterior of the Countdown property has recently been repainted and internally a pharmacy has been added to further enhance its appeal to customers who can get on with their grocery shopping while their prescriptions are being made up,” says Gorton.
Mark Walton, Bayleys Tauranga’s commercial manager, says the property’s prime location in the shopping centre, opposite one of its two main entranceways off Fraser Street, means it has high exposure to passing traffic and the centre’s customer base.
Fraser Cove was developed in 2002 by the New Zealand Retail Property Group (NZRPG), master developers of the Westgate Centre in Auckland, with an initial net lettable area of approximately 19,000 sq m and The Warehouse as its anchor tenant.
‘It has subsequently expanded substantially into a 32,500 sq m retail and community hub with a variety of food and beverage outlets, a gymnasium and a range of speciality and large format retail stores,” says Walton. “As befits its coastal location, Fraser Cove has a welcoming and beach-like feel, with brightly coloured paved pathways and palm trees winding through its carpark where over 1,000 free parking spaces are a major attraction for customers. Excellent transport links, including easy motorway access and nearby bus stops, means it’s highly accessible to a wide customer base and demographic.”
In addition to its anchors Countdown and The Warehouse, its 38 tenancies include other national retailers such as Warehouse Stationery, Kathmandu, North Beach, Bed, Bath & Beyond, Big Save Furniture, Godfreys, Babycity, Toyworld and Repco, with longstanding food and beverage tenants including the World’s End Sports Café bar and restaurant and Burger King.
Walton says the centre is well positioned between Tauranga’s central city and the densely populated residential suburbs of Tauranga South, Gate Pa, Parkvale and Greerton to the south.
“This is a well located asset in the heart of one of New Zealand's strongest and fastest growing regional economies, with Tauranga continuing to experience strong growth in population numbers up over 10 percent in the past four years,” says Walton. “The area in which the property is situated is close to many of Tauranga’s most popular schools and major employment hubs such as the CBD and Tauranga Hospital plus a wide range of excellent restaurants and cafes. It is a location in constant demand by retailers, which is reflected in low vacancy rates.”