The 21,494sq m retail site has 54 tenants. Photo / Supplied
The 21,494sq m retail site has 54 tenants. Photo / Supplied
The Bethlehem Town Centre shopping mall plus neighbouring development land have been sold for $102.5 million - in what is believed to be one of Tauranga's largest commercial property transactions.
The 21,494sq m retail site, which has 54 tenants - including Kmart, Countdown, BP, Smiths City and Chemist Warehouse - has been unconditionally purchased by property funds management business PMG Funds Limited.
It's to be added to the company's Generation Fund, the fifth and latest commercial property fund that PMG has established since it was founded in 1992.
The adjoining 1.2ha of land, which includes a childcare centre, has been sold for $7.7m and is likely to undergo residential development, subject to obtaining the necessary council consents.
The centre was jointly owned for many years by private Bay of Plenty family interests with international institutional investors, and managed by AMP Capital.
The change in ownership is scheduled to take effect towards the end of July.
Bayleys Tauranga broker Jim McKinlay transacted both sales and said they reflected strong underlying confidence in the city's property market, with strong commercial property demand across all price points in the city.
He said it was driven by Tauranga's rapid population and economic growth.
"A transaction of this size and scope is something out of the ordinary and represents a massive vote of confidence in the city's continuing growth story," he said.
PMG head of investor relationships Matt McHardy and PMG chief executive and director Scott McKenzie. Photo / Supplied
Originally developed in 2009 with Countdown as its anchor tenant, Bethlehem Town Centre was expanded seven years later with the opening of the Kmart store on a 12-year lease term.
The centre's roads were reconfigured to accommodate the increased vehicle and foot traffic from the large new tenancy and car parking was expanded to accommodate over 1000 vehicles.
A new BP Connect site, with a 15-year lease, was also opened in the centre in July last year.
Other sizeable tenants include Unichem Pharmacy and Paper Plus.
The remaining tenancies are a mix of national and local food and beverage and smaller retail premises, and the centre currently has 97 per cent occupancy.
McKinlay said the centre was designed as an outdoor-focused shopping mall with interconnecting building precincts.
He said it developed a strong connection with locals and drew in other customers given its proximity to central Tauranga.
PMG executive director Scott McKenzie said the property was purchased to provide diversification for the Generation Fund, and another industrial holding in Lower Hutt will also to be added to the fund.
The fund was initially established in February last year with three industrial properties located in Hamilton, Wellington and Christchurch.
"The Bethlehem Town Centre provides excellent exposure to the retail sector and in particular a premium quality retail hub."
McKenzie said centre provided "excellent" exposure to the retail sector, and in particular, a premium retail hub.
He said this was underpinned by large retailers that drove car and foot traffic to the strategically placed site on State Highway 2 in the affluent suburb.
The purchase centre has lifted the value of commercial property managed by Tauranga-based PMG's five funds to over $750m.
Fund investors are now able to buy additional units as a result of the purchase of the centre and the Lower Hutt industrial property.
The Bethlehem Town Centre is among more than $240 million of suburban shopping centre and large-format retail sales concluded by Bayleys since the beginning of last year.
Also selling recently in Tauranga, for $44m, was the Tauranga Crossing Lifestyle Centre, occupied by Foodstuffs subsidiary Gilmours, Farmers and Bed Bath & Beyond.
Another suburban shopping centre, the Kelston Mall in West Auckland, was sold on behalf of PMG Funds to a Singaporean investor for $43.4 million.
Three Countdown supermarkets in Fraser Cove Shopping Centre, Tauranga, Orewa and Porirua and a Bunnings Warehouse hardware store in Grey Lynn have been sold to separate purchasers at a combined total of $118 million.
Bayleys' national director commercial Ryan Johnson said predictions that the retail property market would take a substantial hit from Covid-19 lockdowns have proved to be wide of the mark.
"Retail spending has held up much better than expected and consequently we are experiencing continuing high levels of investor enquiry for well located retail offerings, ranging from small unit titled premises right through to these large-scale properties."
