New Plymouth supermarket asset offers rewards

The land and buildings of a prominent central New Plymouth supermarket are for sale, with the asset’s favourable lease structure, location, and inherently defensive qualities elevating it as an investment proposition.

The property at 174 Courtenay Street was built in 1986 and has undergone a number of refurbishments since, with the latest seismic works to bring the building up to 80 percent new building standard, considered A-grade, nearing completion.

The property is fully leased to General Distributors Limited, trading as Woolworths.

Woolworths New Plymouth Central has a floor area of 3,760sqm. The conventional and functional supermarket layout with dedicated bakery, delicatessen, and seafood departments, is supported by storage, offices, and a covered loading area. There are 100 basement carparking spaces, along with 54 on-grade car parks. The property is adjacent to the CBD’s only McDonald's outlet, and it leverages the synergies associated with shared customer carparking.

The 5,939sqm site has three street frontages, and is positioned between the Courtenay Street and Leach Street one-way systems which both form part of State Highway 45. Courtenay Street is considered the city’s golden mile for supermarket and fast-food businesses, and runs parallel with Devon Street, the main retail strip.

The property returns net annual income of $790,000 plus GST, with General Distributors Limited’s long-standing lease having a current lease expiry of 30 June 2029, a further four, six-year rights of renewal to be exercised, and a final expiry date of 30 June 2053. The lease provides three-yearly reviews to market, with the next rent review scheduled for July 2026.

The vendor, a single asset property fund, has engaged Sunil Bhana, Mike Houlker and Iain Taylor of Bayleys to sell the property by deadline private treaty closing Thursday 4th December.

Bhana says the favourable net lease makes this asset eminently attractive to investors, with expected rental uplift at the next market rent review adding to the opportunity.

“Supermarket assets remain sought-after by investors as the essential service function makes them a defensive investment prospect - particularly those with net lease structures as Woolworths New Plymouth Central offers.

“There’s upside to be realised here through positive rental reversion, and alignment with Woolworths’ national refurbishment programme over the medium term.

“Given the size of the landholding and the scale of the building and associated infrastructure, it would be difficult to replicate this CBD offering in today’s market.”

The Mixed Use-zoned property is a strategic CBD site, with Taylor saying the New Plymouth commercial market has a lot to offer, with investors based outside of the region seeing value in well-presented property with sound tenant covenants.

“The yields are attractive, and the region itself is performing well off the back of a strong rural economy which is also driving local investment activity.

“Farmers and rural landowners are diversifying into commercial real estate to underpin on-farm incomes, shore up succession planning, and to mitigate the impact of climate events and commodity price fluctuations.

“With more money to be injected into the economy on completion of the Fonterra-Lactalis deal which will see Fonterra divest its consumer retail brands next year, we expect to see even greater interest shown in provincial areas like Taranaki.”