Submitted by Joe Hendren on Tue, 12/05/2009 - 12:00am.
MITRE 10 has put its New Plymouth and Kaikoura bulk retail hardware stores up for sale to investors looking for a long-term income stream.
Nick Howe-Smith of Bayleys North Shore Commercial and Industrial said the Mitre 10 Solutions at 107 Beach Road, Kaikoura and Mega Mitre 10 on the corner of Vickers and Rifle Range Roads in New Plymouth could appeal to investors wanting to add modern, purpose-built facilities with long-term leases locked in.
The Kaikoura retail warehouse was built in 2007 on a 5842 square metre site close to State Highway 1. It has a total lettable building area of 1048 sq m, a garden centre of 615 sq m, landscape yard of 406 sq m and parking for 37 cars. The head lease to Mitre 10 NZ Limited is renewable in 2019 with a net rental of $152,234 plus GST per year.
The New Plymouth Mega Store is close to New Plymouth's Valley Mega Centre, a new Countdown Supermarket (under construction) and VTNZ testing station.
Opened in 2007 it has bulk retail, cafe, garden centre, inwards goods, and covered drive-through warehouse and mezzanine offices. The site is strategically located given the substantial development in this area over the last decade, said agent Daryl Devereux. It also had convenient access to State Highway 3, the route to New Plymouth CBD from the airport and the north.
The 1.7 hectare property has extensive car parking adjacent to the Countdown Supermarket, a total lettable area of 11,109 sq m and generates an annual rental of $1,220,000 plus GST.
The head lease is to Mitre 10 NZ Limited and expires on September 1, 2019 with cost price index rent reviews every three years. Tenders for both the New Plymouth and Kaikoura properties close on 28 May.
Mitre 10 general manager commercial Ray Clarke said nearly all of the 100 stores in the co- operative chain were owner- operated. The Kaikoura and New Plymouth stores were developed to expand the chain and were being sold so it could build more stores.
Big deal: The Kaikoura (above) and New Plymouth (below) Mitre 10 bulk retail hardware stores which have been put on the market.
Submitted by Joe Hendren on Mon, 28/07/2008 - 10:41am.
Retail landlords must focus less on the bottom line and more on their tenants' needs or risk being lumbered with a portfolio of empty stores, say leading retailers.
High interest rates, a sluggish housing market, unprecedented fuel costs and inflated food prices have hit consumers hard, leaving all "but a lucky few" retailers juggling high rents and low sales. But with the gloom showing no sign of lifting soon, pressure is mounting on landlords to adapt to market conditions and work with retailers to see out the tough times.
Speaking at the Property Council's annual retail conference in Auckland, Stephen Alach, the general manager of surf retailer Amazon, said too few landlords appreciated how hard retailers were being hit by a downturn that extended from before Christmas. "All bar a few [landlords] don't look at anything except the dollars. They won't last if they continue with this ducking and diving attitude to tenants," he said. "Rent demands stay the same while some retailers are dealing with the reality of sales being up to 60 per cent down [on last year]. If the landlords don't react soon they are going to lose a lot of tenants."
Though retail giants like The Warehouse Group and Briscoe Group could survive the harsh times, independent retailers are more likely to "take their losses and walk away" rather than risk parting with more and more cash, Mr Alach says.
"It will be the landlords who feel the squeeze when tenants pull the plug and walk away. There needs to be a better understanding if we are going to get through this."
Landlords needed to spend more and think outside the box to draw consumers away from their comfy couches and plasma screens into the shopping environment, he said. This meant generating new store concepts with tenants, being more realistic about rental returns, and looking 10 years ahead instead of just one or two years.
"When you're caught in a wave, you can't breathe - you feel like you're choking. That's how it is for retailers at the moment, and that's how it will be for landlords if they don't react."
According to Statistics New Zealand, 15 of the 24 retail sectors had lower sales in the March quarter than in the last quarter of 2007. Those who are highly reliant on discretionary spending had a particularly tough year. Appliance stores experienced a 15 per cent fall in sales, furniture and flooring took an 11 per cent hit, and clothing lost 6 per cent.
New Zealand Council of Shopping Centres president Evan Harris said landlords needed to take a more "constructive" approach and "realise some of the pain" that retailers were suffering. However, John Bougen, director of national retail property developer Prime Retail, said the answer lay in fostering new tenants. "There will be demands for rent reductions. It's a call we will all be forced to consider over the next few months. The question is, `How long will it last?' Longer than a bank guarantee," he said. "[Landlords] need to consider fostering new tenants. They may not be the tenants you want in the good times. In the 1990s [recession], we had them on short-term leases so [that when things improved] they could be moved with dignity."
Submitted by Joe Hendren on Wed, 02/07/2008 - 10:22am.
In a move which flies in the face of the economic downturn, Australian home improvement chain Bunnings says it plans to open six new stores in New Zealand, investing $90 million and creating 500 jobs.
The big-format retailer has announced expansion plans which show its retail outlets could grow from the current 16 to 22 stores - and then to 26 in the near future. Brad Cranston, general manager of Bunnings in New Zealand, said the business would open at Westgate in Auckland, increasing its footprint in Auckland to five big stores. West Auckland was a significant growth area, and the new store would have a hire shop, free DIY clinics, a children's playground, a cafe and two levels of carparking, he said.
Cranston was not concerned about the economic slowdown. Sales turnover was down on last year and same-store sales had dropped within the last two months, but Bunnings views New Zealand as an area of high growth, he said. The sales downturn was "something of a blip" and did not affect the firm's expansion drive.
Bunnings had invested more than $250 million in New Zealand this decade, Cranston said. The business started here in 2001 following the purchase of the Benchmark Building Supplies stores and now makes annual sales of more than $500 million, Cranston said.
Bunnings owned a new Nelson store and would own the new Westgate store, he said. The Westgate deal comes after a new large-format Bunnings store was developed in Nelson, where the retailer opened yesterday. Previously, the chain announced plans to develop stores in Gisborne, Wellington's Lyall Bay and Upper Hutt, and Dunedin. Some of its new stores cover more than a hectare.
Cranston said the business was also examining establishing a further four stores after that. Outlets in Hawkes Bay, Taranaki, South Auckland and the North Shore were quite on the cards, he said. However, plans for those areas were not yet finalised.
Cranston said Bunnings was showing confidence in the market with the new projects. Retail sales have been falling, in line with the shrinking economy, but he is confident about the retail niche Bunnings has carved out since coming here seven years ago.
"The creation of these 500 new jobs will have a positive impact on the community," he said. "As well as offering new employment, Bunnings Warehouse team members are encouraged to play an active part in their local communities by supporting local community groups.
Last year, Bunnings completed the sale and leaseback of 11 retail warehouse properties in Australia and New Zealand, netting A$203 million ($229.5 million). Auckland-headquartered Dominion Funds Management bought five New Zealand properties, while Australian fund Charter Hall bought the remaining six properties in Australia.
Bunnings is owned by Australian conglomerate Wesfarmers, and its main competitor in New Zealand is Mitre 10 Mega, which is also still expanding and aiming for 20 large-format stores.
Mitre 10 has been in New Zealand since 1974 when it was introduced by 15 hardware retailers who had watched the success of the retail formula in Australia. They felt it was time New Zealanders, too, were offered the cost savings achieved when retailers could pool their orders, buy in bulk and promote nationally, Mitre 10 says. More than 120 stores are operating under the Mitre 10 banner including more than 15 Mega stores.
* Opened in New Zealand in 2001.
* Has 16 large-format stores.
* Plans to have 22 stores soon.
* Melbourne-headquartered business.
* Became a public company in 1952.
* Founded by migrants from London.
Submitted by Joe Hendren on Tue, 31/07/2007 - 10:44am.
Carter Holt Harvey's head office in Manukau has been sold to Australia's Valad Property Group, which is buying A$277.3 million of property from Carter Holt.
The 8.5ha site, legendary for once having a nine-hole golf course used by Carter Holt executives, is the jewel in the collection of properties sold. It is the biggest of five development sites being purchased. Billionaire Graeme Hart, Carter Holt's owner, is not commenting on the transaction.
Mark Frinsdorf, Valad's head of capital transactions, said sale and leaseback agreements would operate on most of the properties but the head office property was earmarked for development by Valad. He said no decisions had been made on what to build on the site, but a high-tech business park or a bulky goods/office precinct were possibilities. Valad had looked at the Lion Nathan brewery site sold in Auckland last week but had decided on the deal announced yesterday. "We do think it is a very strategic site," Frinsdorf said.
The portfolio purchased includes 15 Carters building supplies sites, which are subject to nine-year sale and lease-back agreements with two six-year rights of renewal. Similar terms apply to 10 packaging plants in the deal, five of which are in Australia. Valad will earn a yield of 7.1 per cent on the properties. The company already owns buildings in New Zealand, including Maritime Towers in Wellington and West Plaza in Auckland.
Submitted by Joe Hendren on Tue, 10/07/2007 - 9:21am.
The run of bad luck at a new Pak'nSave supermarket in Auckland has
worsened as a fire station abandons plans to shift to the site and
contamination issues are discovered. The New Zealand Fire Service
has scrapped plans to shift its Takapuna base to an area of the site
alongside the new supermarket, which has stood empty for two years
because planning consents were found to be invalid. The Fire Service wanted to develop a new two-unit station beside the controversial and still-unopened store on Wairau Rd.
The service had struck a deal to buy part of the site based on an
arrangement that supermarket giant Foodstuffs would secure valid
planning consents. The service regarded the site as the best location
for its regional North Shore base. But two years of delays have now forced the service to drop its plans and look elsewhere.
In another blow, a small area of subsurface ground contamination from
drycleaning fluids and printing inks has been discovered on the site. During construction, Foodstuffs found the noxious substances,
thought to have come from run-off of neighbouring businesses which have
The latest developments add to Foodstuffs' problems
with its Wairau supermarket, dogged by an 18-year battle to begin
building, then hit by a fire caused during construction, and subject to
a legal dispute with rival Progressive, owned by Woolworths Australia.
Kevin Stacey, the Fire Service's national manager of strategic assets, said a
search was now on for other sites in the Takapuna area. "I guess we're disappointed in terms of the time it has taken." Murray
Jordan, general manager of property development at Foodstuffs, said
delays had deterred the Fire Service, which had now scrapped its plans
to shift to the site at Wairau and Porana Rds. "Due to the continued delays, the Fire Service has decided not to
proceed with its plans to relocate the Takapuna Fire Station to the
site, but will pursue other options for relocation," Jordan said.
Foodstuffs has battled for 20 years to open the new store, which has been built by Fletcher Construction.
Foodstuffs subsidiary the National Trading Company got resource consent for the
store and a two-appliance Takapuna station and North Shore Fire
District headquarters on the corner site But Progressive took
the case to the High Court, asserting North Shore City was wrong to
grant Foodstuffs a non-notified consent. The High Court ruled the
consent was invalid. Foodstuffs was about to take the case to the Court of Appeal last year but then abandoned that plan.
In December, the council decided to process a new resource consent
application on a limited notification basis which meant only the
immediate neighbours would have a chance to object, and Progressive
would be locked out of the process.
Foodstuffs has applied to the North Shore and Auckland Regional Councils for new consents.
Pak'nSave at Wairau Rd has been dogged by a series of misfortunes:
- An 18-year battle to begin building on the site.
- Fire engulfing the building as it was being finished.
- A legal wrangle which has kept the store shut.
- Abandonment by the Fire Service, which jettisoned its plans.
- Contamination of the site, discovered during construction.