Hamilton’s new look Centre Place South for sale
A street level view of the Centre Place South shopping centre which is for sale in the Hamilton CBD.
A major portion of the Centre Place Shopping Centre in the Hamilton CBD is for sale in Colliers International’s first 2015 portfolio of 40 properties which was launched yesterday.
Centre Place South is anchored by the nationwide tenant Farmers and generates $3.86 million in total net annual rental income.
John Goddard, with colleagues Andrew Reed and Mark Brunton, is marketing the property for sale by way of international private treaty closing on March 12.
The recently redeveloped property is on a 12,280 sq m site on the corner of Ward St and Worley Place in the heart of Hamilton city, and is fully leased to Farmers and 27 separate retailers with structured growth built into most specialty leases.
Goddard expects the property will attract strong interest from family trusts, institutional owners and high net worth buyers from New Zealand, Australia and across Asia.
“This investment opportunity offers the strong tenant covenant of one of New Zealand’s most recognised department stores and other well-known Australasian names occupying retail outlets in the centre,” he says. “The centre is 100 per cent leased, which is a significant endorsement of the strength of the property as a retail destination, and the quality of its redevelopment and management undertaken by Kiwi Property Group [KPG], New Zealand’s largest listed diversified property investment group.”
The shopping centre is a leading Hamilton retail destination for fashion, food and entertainment. It consists of Centre Place North (CP North) and Centre Place South (CP South) which are located on either side of the pedestrian thoroughfare of Ward St. CP South’s 10,933 sq m net lettable area represents almost 40 per cent of the centre’s combined lettable area.
Goddard says retail sales have grownmarkedly since the centre’s redevelopment which brought the two centres effectively under the same roof and capitalised on the strong pedestrian traffic through Centre Place - one of the CBD’s main pedestrian thoroughfares.
“CP South represents an opportunity for an astute invest or to acquire one of Hamilton’s most attractive retail assets and benefit from its expected continued growth,” says Goddard.
He says the redevelopment and refurbishment of Centre Place wascompletedat a cost of more than $60 million. The redevelopment of CP North included the addition of a new cinema complex and dining lane, along with a complete overhaul of the centre’s food court.
At CP South the redevelopment included the additionof the two-levelFarmers departmentstore, a remodelling of a specialtyretailareaand creating an enclosed access-wayacrossWardStreet to provide an immediate connectionbetweenCP SouthandCPNorth. CP South has an A-grade Initial Evaluation Procedure (IEP) seismic rating.
Aerial view of the Hamilton CBE with the roof area of the Centre Place South shopping centre (at left) identified by a red border.
Reed says the sale of the centre comprises one of New Zealand’s premium retail investment opportunities for 2015.
"The property offers a substantial and growing return, with annual structured rent reviews in most leases,” he says. “The centre benefits from long leases to a diverse collection of retailers. Typically they are for six-year periods which commenced on completion of the centre’s redevelopment in 2013 with a weighted average lease term in excess of eight years.
"Paired with the investment of leases to several of Australia and New Zealand's most successful retailing organisations, this has all the makings of an exceptional, long term investment,” Reed says.
He says KPG will maintain full ownership of CP North but is offering its services for the continued management of CP South. KPG owns more than $2 billion of assets in a portfolio comprising prime office assets and major regional shopping centres including Sylvia Park, Lynn Mall and North lands and has a specialised in-house retail management team which undertakes property and facilities management, marketing, leasing and development.
The specialty retail component of CP South is arranged over a single level with escalator access to 450 basement car parks that are separately owned by Hamilton City Council. Farmers’ new, two storey store is entered centrally from the retail mall with an in-store escalator travelling to the upper level.
Included with CP South are two retail ‘pods’ situated on Ward St that accommodate three of the specialty tenancies with a combined net lettable area of 375 sq m.
The high profile retailers occupying CP South comprise fashion, jewellery, food, health, and homeware offerings. There centre furbishment specifically attracted a number of well- known brands, including Stewart Dawson, Michael Hill, Valley Girl and Barkers.
“The property’s high profile and prominent corner position, with one of the highest pedestrian counts in the city, makes it ideally placed to capitalise on a central city zoning that aimsto encourage the growth of the CBD as a fun and vibrant place to live,work and socialise,” says Reed.
Hamilton is New Zealand’s largest in land urban centre and its CBD is the Waikato region’s premier business, entertainment and shopping precinct - home to 1200 business and property owners.
“It is also the country’s thirdfastest growingurbanarea that is just a 90 minute drive to Auckland city and even closer to Mangere airport which the country’s main international gateway.”
John Goddard of Colliers