JAZIAL CROSSLEY
Supermarket chain Progressive Enterprises has put four of its North Island properties up for sale under arrangements to lease them back for up to 55 years.
The subsidiary of listed Australian company Woolworths will lease back the freehold properties at Te Awamutu, New Plymouth, Tokoroa and Pukekohe on 15-year terms, with rights of renewal.
Progressive national communications manager Luke Schepen said its business was not in holding property long term.
“As the property investment market is strengthening with increased demand for good quality property with strong tenant covenants, such as is offered with these properties, it is an appropriate time to sell,” Schepen said.
“We own a number of existing supermarkets and also vacant sites upon which we plan to build new supermarkets in the future.
“We predominantly lease the majority of our supermarkets across the country.”
He would not comment on what the chain planned to do with funds raised by the property sales.
The Pukekohe supermarket for sale sits on a large site, with half the extra land leased to Burger King, and resource consents in place to lease out another part of the site to a petrol station company.
Progressive paid $5.79 million for the site in 2009, but with the supermarket now built on it the value has shot up to $14m.
The Colliers agent marketing the site, Alan Pracy, said the property was on an arterial road with thousands of vehicles going through it each day.
“The supermarket is located in a well-known bulk retail location, with nearby tenants including Mitre 10, Briscoes and Harvey Norman among other retailers.”
At Tokoroa, the Torphin Cres Countdown is one of the town’s two major supermarkets. The rental agreement will be $658,000 a year for the 1.05ha site.
Te Awamutu Countdown was only recently built. Progressive paid $5.9m for the site in 2009 and it now has a rating valuation of $10.55m with rental income of $1.68m.
In New Plymouth, Countdown Spotswood serves the city’s western side. The supermarket will pay $1.1m a year plus GST to continue tenanting the property.
Tim Lichtenstein, another Colliers agent working on the deal, said the properties would appeal to syndicates and high-net-worth individuals.
“In a sluggish economic climate, supermarkets offer defensive characteristics – while discretionary retailers suffer as consumers rein in their spending, supermarkets are in a `necessity sector’ and continue to thrive.”
The total rental revenue the four sites combined would provide is in excess of $4.7m a year.
– © Fairfax NZ News
Sponsored links