Growth Minister Nicola Willis outlines how she is getting advice on a possible supermarkets de-merger. Video / Mark Mitchell
Woolworths’ property arm, General Distributors, has won Overseas Investment Office approval to lease 10.5 hectares of land in Christchurch to expand its already large South Island distribution centre.
Toitū Te Whenua Land Information NZ released the latest decision agreeing to Woolworths’ application.
Approval was announced a day after Finance MinisterNicola Willis said she was concerned “significant action may be required to foster genuine competition ... I have commissioned specialist external advice on the ways in which the existing supermarket duopoly could be restructured to improve competition”.
She wants an examination of how the existing supermarket duopoly could be restructured to improve conditions, including a possible de-merger of existing brands.
Woolworth's distribution centre for the South Island.
Approval of the huge Christchurch leasehold transaction allows Woolworths to expand its existing distribution centre, and consent was granted under the significant business assets pathway.
“The applicant already leases part of the land in Hornby South for its warehouse distribution facility. The distribution centre is being expanded onto the other part of the land and the existing lease is being varied and extended to reflect the larger site and facility,” the decision, released today, shows.
The lessor is Shands Road Nominees as custodians of the New Zealand-owned Shands Road Limited Partnership and the cumulative lease obligations are $213,270,468 over a 15-year term.
Matthew Grainger, Woolworths NZ's acting property general manager, at the site of a new $100m+ 20,000 square metre (2ha) Countdown fresh distribution centre being built in Wiri. Photo / Sylvie Whinray
In January, the Herald reported how population growth and disruptions in the past few years had prompted Woolworths to apply to increase the size of its national distribution centre in Auckland by 188%.
Property director Matthew Grainger said the business had sought consent to increase the floor area of its building at 60 Kerrs Rd, Wiri, from 27,000 sq m to 78,000 sq m to keep up with growing demand.
The expansion would not happen immediately but was prompted by two factors, Grainger said: growth combined with previous years’ disruptions.
“As New Zealand grows, we’re always looking at our network to ensure it has enough capacity to keep up with demand well into the future. The last few years of international disruptions have shown even more clearly the need for Woolworths to maintain a modern and resilient supply chain,” he said in January.
Auckland Council notified General Distributors’ resource consent application to develop the new ambient national distribution centre for all product lines that don’t need chilled storage.
Notification means anyone can have input into commenting on its plans.
That said the existing building wasn’t large enough.
On the Christchurch site for Woolworths, Centuria Funds Management (NZ) offered shared ownership via the Centuria Shands Road Property Trust.
That gave an insight into the size of Woolworths in New Zealand: “The tenant advises that it operates 188 Woolworths supermarkets in New Zealand, with annual revenue exceeding $7 billion and total assets of more than $2b in the year to June 30, 2024,” advertising for the investment said.
However, three Woolworths supermarkets in Auckland have sold lately.
Woolworths Te Atatū, Woolworths Westgate and Woolworths Mt Roskill changed hands: the first is to become a New World, the other two are to continue as existing operations under new owners.
Anne Gibson has been the Herald’s property editor for 25 years, written books and covered property extensively here and overseas.
