Owned by the New Zealand subsidiary of ASX-listed Woolworths Limited and with a new 10-year leaseback to General Distributors Limited trading as Countdown, the property returns an estimated net rental of $1.715 million per annum plus GST and outgoings, with rights of renewal extending occupation through until 2083.
The new store is 35 percent bigger than its predecessor and has Countdown's latest design, fitout and technology initiatives, focused on energy efficiency and emissions reduction.
Sustainability features include LED lighting and transcritical refrigeration to reduce energy outgoings.
Bayleys national director of commercial and industry property sales Ryan Johnson said the proceeds of the sale will be reinvested by Woolworths New Zealand into the company's development pipeline.
Supermarkets were proving to be a sought-after and defensive asset class, trading exceptionally well during and post-pandemic, Mr Johnson said.
“Astute buyers will be drawn to the investment grade tenant covenant to New Zealand's largest supermarket brand and the long-term cashflow and tenure.
“There is capital circulating in the market seeking exactly this sort of premium, passive new-build asset with A-grade seismic credentials, and underpinned by long tenure and strong trading income to provide a defensive inflation hedge.
“Given the scarcity of premium stock in the market for inter-generational and ultra-high-net-wealth acquisition, Countdown Gisborne provides a compelling opportunity — particularly in light of the replacement value for an asset such as this, and the fact that even with stronger fixed interest returns over the past six months, after-tax real returns are still in negative territory of around 3 percent,” Mr Johnson said.
Bayleys Gisborne commercial and industrial sales and leases representative Mike Florance said it was “very rare for investment-grade property to become available in Gisborne”.
“Despite the well-performing regional economy, property assets over $10 million do not often hit the open market of Gisborne.”
“There was plenty of confidence being demonstrated in the broader commercial and industrial market with no evidence of value reduction, and the Countdown building would be the highest-value property — via an on-market campaign — the city has seen.”
It was expected the property would appeal to Gisborne and Hawkes Bay commercial investors committed to the East Coast, or those outside the area with nostalgic connection to the region.
“The rural market is actively diversifying outside of their agricultural and horticultural core business, yet wanting their dollars to remain within the region where they can drive past their asset and see it,” Florance said.
“Significant investment was being shown in the region's primary sector and Gisborne was well placed for growth in its economy, infrastructure and population.
He pointed to about $90m spent by Gisborne District Council last year, with a further $130m forecast to be spent by it over the next calendar year and a recent Government boost of $4.2, for upgrades to local infrastructure.
A lot of new housing development was under way and planned.
“A recently completed Housing Business Assessment forecasted that Gisborne will need 30 percent more houses over the next 30 years, equating to approximately 5000 new homes,” Florance said.
Projections showed there could be a 50 percent uplift in supermarket and grocery spending between 2018 and 2043, he said.
Countdown is the country's largest private sector employer with an annual national business turnover in excess of $7.5bn.
