Close
 

Fancy owning large-format retail?

  • Opinion
  • September 15, 2016
  • Warren Head
Fancy owning large-format retail?
Image: Kerryn Smith

How many times have you wondered what it might be like to own the supermarket that scoops up so much of your discretionary income? Until the sheer size of today’s retail emporiums, and the likely staffing, heating and lighting costs come to mind?

How, then, does indirect ownership of bricks and mortar appeal? Now we’re onto to something, even in the new era of the digitised shopping basket.

It was of little surprise then that the listed property group Stride Property had little difficulty persuading investors of the merits of investing in a fairly complex stapled spin-off, Investore Property. This was a newly formed listed property vehicle that also listed on NZX.

Stride Property, better known for now for its NorthWest shopping centre development, was raising capital at $1.49 a share to partially fund the acquisition of 14 Countdown supermarkets from Shopping Centres Australasia Property Group Trustee NZ Ltd (‘SCA’).

Investore is instantly one of the biggest retail sector owners in the land, with a portfolio of 39 large format retail properties formed through the combination of three portfolios, two currently owned by Stride Property and a third being progressively bought from SCA.

External management will lie with Stride Investment Management Ltd (SIML).

The attraction for investors is that supermarket property is highly defensive because there is a quality tenant base in this case, with some ~95 percent of the portfolio leased to stable non-discretionary supermarket operators.

There is also a long weighted average lease term of 14.8 years, with a high proportion of fixed rent reviews and, did I mention, 99.7 percent occupancy.

The tenants include Countdown, Foodstuffs (New World and Pak’nSave) and Fresh Choice, The Warehouse, and Mitre 10.

Investore swept to around $1.61 a share on listing. For the reason it intends to pay out 95-100 percent of distributable profit and on its IPO value of $1.49 that means a gross yield of around 7.3 percent.

The presentation made by Stride at the time of the Investore IPO showed that it will have 75 tenants of its large format retail property and the net contract rental stream will ~$43 million.

The portfolio is weighted 33 percent towards Auckland, Wellington 17 percent, Canterbury 14 percent and Waikato and Otago 8 percent each, with other North Island at 16 percent and other South Island at 4 percent. There are 10 properties in Auckland.

Retail owners may be interested in the fee structure: there is a building management fee of $10,000 per year for each property and a management fee of 0.55 percent of the portfolio value up to $750 million, and a leasing fee of 8 percent of the annual gross rental. The maintenance fee is 4 percent of the cost of any repair and maintenances work.

This story originally appeared in NZ Retail magazine issue 745 August/September 2016

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Coastlands celebrates 50 years in business

  • Opinion
  • November 13, 2019
  • Jennie Gutry
Coastlands celebrates 50 years in business

Coastlands Shoppingtown in Paraparaumu is celebrating its 50th year in business. Coastlands 50th birthday event manager Jennie Gutry shares some reflections on the centre's early years.

Read more
 
 

Me|today pairing skincare and supplements launches

  • News
  • November 13, 2019
  • Sarah Dunn
Me|today pairing skincare and supplements launches

Consumers are often highly engaged with the brand that produces their skincare products, but less so when it comes to supplements. The idea behind me|today, a start-up selling paired product in both categories, is to leverage that engagement.

Read more
 
 

Michael Hill to offer lab-grown diamonds in New Zealand

  • News
  • November 11, 2019
  • Sarah Dunn
Michael Hill to offer lab-grown diamonds in New Zealand

Traditionally, prospective proposers should spend three months’ salary on an engagement ring. It should be a diamond solitaire, ideally one carat or bigger. However, in a market where many younger shoppers are struggling with student debt, concerned about housing affordability and suspicious of mined diamonds’ ethical credentials, Michael Hill has moved with the times and introduced an alternative.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Winners of the 2019 Westpac New Zealand Franchise Awards announced

  • News
  • November 11, 2019
  • The Register team
Winners of the 2019 Westpac New Zealand Franchise Awards announced

This marked the 25th year for the Westpac New Zealand Franchise Awards. Independently judged by the NZ Business Excellence Foundation, the awards are organised by the Franchise Association of New Zealand. Read on to find out the winners.

Read more
 
 

Yealands Wine Group appoints Tiffani Graydon as CEO

  • Who's Where
  • November 9, 2019
  • The Register team
Yealands Wine Group appoints Tiffani Graydon as CEO

New Zealand wine producer Yealands Wine Group has today announced the appointment of Tiffani Graydon as its new chief executive. Graydon has previously worked at Yealands in a GM sales and marketing capacity.

Read more
 

Ziera likely to close all its stores after no buyer found

  • News
  • November 8, 2019
  • The Register team
Ziera likely to close all its stores after no buyer found

After trading under administration for some six weeks, Ziera has announced that as no buyer interested in purchasing the whole of the business has been found, it’s entering a ‘closing down sale phase’.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}