Shore City goes to market
Good exterior elevated view of Shore City shopping centre which is for sale at 52 Anzac St, Takapuna.
Shore City shopping centre occupying almost an entire city block in Takapuna on Auckland’s North Shore is up for sale.
The sub-regional shopping centre on its large 1.26 hectare landholding at 52 Anzac St is anchored by a Farmers department store and includes several well-known Australasian retail outlets.
The freehold property, generating about $7.4 million in total net annual rental income, is being marketed for sale by international private treaty closing at 4 pm on September 10 through Andrew Reed and John Goddard of Colliers International along with Carl Molony and Philip Garland of Stonebridge Property Group.
The shopping centre has a net lettable area of 13,990 sq m over two levels of enclosed retail space with 73 tenancies. It also has parking bays for 830 vehicles in an adjoining seven level multi-storey carpark building.
The property is 98 per cent leased by area, with more than 46 per cent of the centre’s leases not expiring until 2019.
The centre’s layout consists of retail tenants spread across Levels One and Two with a Farmers department store on Level One and Level Two. Les Mills’ World of Fitness and a rooftop car parking occupy Level Three. The multi-level car park provides direct access to all three levels of the shopping centre.
Reed says very few sub-regional shopping centres are offered for sale in Auckland and he believes this will be one of New Zealand’s premium retail investment opportunities for 2015.
“Shore City has performed well with strong tenant retention rates and has received significant interest from new retail brands wanting to enter the centre. Takapuna is also an area targeted for major intensification, and Shore City is strategically placed to take advantage of that for its new owners.”
Molony says over and above the property’s exceptional fundamentals as a retail investment opportunity, it also presents solid potential for redevelopment.
“Prospective owners could consider reconfiguring the centre, adding more gross floor area or potentially incorporating residential space onto the site - subject to further planning work under the Proposed Auckland Unitary Plan.
"Should the draft Takapuna Plan be adopted, Shore City is well positioned to benefit from increased planning allowances for height and floor space ratio, creating the possibility for redevelopment.”
Molony says the shopping centre occupies the majority of “an island-type site” and has a flexible lease expiry profile. “It offers a strong holding income for developers to unlock a highly desirable Mixed Use scheme over the short to medium term."
He says Shore City could also attract a diverse range of retail-focussed investors, both locally and offshore.
Interior view of Shore City shopping centre looking from top of escalators at 52 Anzac St, Takapuna.
“With a long established, largely national, tenancy mix as well as being positioned within a strategic, strong socio-economic area, incoming investors have countless options to nurture existing tenancy renewals or to undertake a wholesale repositioning of the property asset.
“The addition of a high quality, fresh food or casual dining precinct to the centre is considered a particularly outstanding opportunity that would complement other recent initiatives within the Takapuna central business district."
Molony says, either way, the centre offers an ideal, long-term, income-generating investment.
Goddard says the property, in the heart of Takapuna, is very close to major arterials and transport links and just a 10 minute drive to the Auckland CBD at off peak times.
“Takapuna has one of the highest pedestrian counts on the North Shore and is a popular Auckland coastal location,” he says.
Reed says large scale investments like Shore City remain a key focus for domestic and international investors.
“Over the past three years, global investors have started to focus heavily on New Zealand as an investment location.
“Among offshore groups investing more than $5 million in New Zealand last year, the total value of transactions exceeded three billion New Zealand dollars. This was an eightfold increase over the previous year, and a level not seen since 2007.
He says that, significantly, more than 60 per cent of these transactions, by value, involved new market entrants.
“Traditionally, New Zealand has not been on their radar. The focus was Australia. However, overseas buyers now view New Zealand as a market providing them with targeted returns and very appealing, transparent legal and tax structures.”
Goddard says prospective buyers can also take confidence from the level of demand for retail space in Auckland.
“The Auckland region’s current 2.4 per cent vacancy rate is the lowest since 2007. Auckland shopping centres are also continuing their strong run, with less than 1 per cent vacancy out of more than a million sq m of space.
“Auckland is New Zealand’s largest city with a population of 1.5 million people and by 2040 it is forecast that another one million people will live here.”