Store sells at mega price

The Mitre 10 Mega store in Lincoln Rd covers 14,187sq m. Photo / NZ Herald

One of New Zealand's largest bulk-retail properties, the 14,187sq m Mitre 10 Mega store in Henderson, West Auckland, has sold for $20 million.

The sale post auction to a private Auckland investor was negotiated by Scott Kirk of Bayleys Auckland and Darryl Devereux and Brian Caldwell of Bayleys North Shore at a yield of 9 per cent on the property's net annual rental income of about $1.8 million.

Mitre 10 (New Zealand) Ltd has a 10-year head lease on the property from last April.

Kirk says the Lincoln Rd building was the biggest bulk-retail outlet of its kind in Australasia when it was completed in 2004 and still ranks well up the scale because of its vast floor space. It comes with 8667sq m of general retail space, a 2467sq metre garden centre, offices and amenities, and a 1036sq m timber yard and a cafe.

Devereux says a previous sales contract on the property had fallen over because the prospective investor could not secure the necessary funding.

"There is still strong investor demand for well-located buildings leased long-term to a major national retailer, with high net worth individuals and private companies looking for these sort of opportunities even at this price level."

The store, with customer car parking for 261 vehicles, sits on the southern end of a 2.76ha site next to one of the country's biggest Pak'n Save stores and a Shell petrol station. The high-profile site is strategically located in Lincoln Rd, one of West Auckland's major arterial routes with a daily traffic count of about 47,250 vehicles.

Kirk says the area is a natural drawcard for business investment because of its high-profile exposure, and has become a very sought-after retail location in recent years as evidenced by the sell down of all 22 commercial properties in the nearby Lincoln North shopping complex in July.

The Mitre 10 Henderson property was sold by family interests of Auckland businessman Vinod Kumar, whose company Magsons Hardware subleases the property from Mitre 10 NZ. Kumar's company also owns Mitre 10 businesses in Botany and Westgate.

Since Mitre 10 Mega format was introduced in 2004, it has flourished, with 22 Mega stores currently trading and a further 15 new Mega stores to be opened within the next two years.