Top investment property at top of the country
Artist’s impression of the new Noel Leeming and The Warehouse store planned for Kaitaia.
A new, purpose built Noel Leeming and The Warehouse store in Kaitaia is being marketed to commercial property investors with a leaseback arrangement in place to both of the high profile retailers.
The 4315 sq m, single level building is due for completion later this year on a large 1.39 ha site at 2 North Park Drive, Kaitaia.
“This property offers an exceptionally strong tenant covenant,” says Jason Seymour of Colliers International, who along with colleagues John Green and Peter Herdson of Colliers’ international capital markets team, is marketing the freehold property for sale by deadline private treaty closing on Thursday October 8 2015, unless it is sold before the deadline by negotiation.
“Both Noel Leeming and The Warehouse are wholly owned by The Warehouse Group - New Zealand’s largest listed retailer,” says Seymour. “So this property offers excellent investment security backed by one of the country’s most successful home-grown companies. Add the new building and a prime land holding to the mix and it has all the attributes of an ideal passive, long-term investment.”
The Warehouse Group includes The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7 Group. The group had a turnover of $2.6 billion last year and employs more than 12,000 people.
The property will be fully leased to The Warehouse occupying 3785 sq m for an initial term of 10 years and to Noel Leeming which will fill 530 sq m of space for an initial period of six years. The new leases, both commencing on settlement, will generate a combined annual net passing income of $642,860.
The Warehouse will have the right to renew the initial term for eight further terms of three years each taking its lease term through to 2049 if all rights of renewal are exercised. Noel Leeming will have two rights of renewal of three years each.
Potential income growth is also on offer through regular rent reviews.
The high, 6.5 metre stud, rectangular building with steel portal framing and reinforced concrete tilt slab and steel cladding will be seismically rated at 100 per cent of New Building Standard (NBS) on completion.
It is internally divided to form the two separate store tenancies, and has an external shared loading and service bay at the rear as well as a high ratio of 175 on-site car parks directly in front of the building.
Both tenanted areas comprise a large, open retail space with separate glazed entrance lobbies and dedicated stock rooms and amenities areas. The Warehouse also incorporates a garden centre.
Green says the property is located in a new commercial area, just 1.5 kilometres north of Kaitaia town centre in an area popular with larger format retailers such as a Pak’n’Save supermarket, Farmlands and Mitre 10.
“It’s positioned on a large, high profile corner site at the junction of State Highway One and North Park Drive,” he says.
State Highway One is the main thoroughfare through the town and links Kaitaia and the far north to Whangarei and other towns and cities to the south.
The marketing of the Kaitaia store follows Colliers’ successful sale and leaseback of several other properties around the country owned by The Warehouse in recent years.
These transactions include the $90 million sale of the retailer’s giant Wiri distribution centre to the Accident Compensation Commission (ACC) in 2012 – claimed by Colliers as “the biggest industrial property sale ever seen in New Zealand”.
Warehouse stores in Snells Beach, Palmerston North, Queenstown and Gisborne have also been sold by Colliers’ brokers in the past three years.
Green says the latest offering comprises a highly desirable long term, income-generating investment, with the tenants responsible for all outgoings associated with the premises under the terms of the lease.
He says inquiries are expected from a range of local and national buyers including individuals, syndicates and property funds in view of the property’s nationally branded tenants.
“This Kaitaia property represents prime investment stock for many buyers looking to add a significant and well-leased holding to their portfolios.”
The Warehouse is New Zealand’s largest non-food retailer, known for its wide range of products from clothing and entertainment to gardening, and now has 92 stores throughout New Zealand.
Noel Leeming is New Zealand’s leading consumer electronics, services and appliances retailer, providing New Zealander’s with technology and appliance services since 1973, and has 76 stores throughout the country.
Jason Seymour (left), & John Green (right) of Colliers International.