Adelaide-based Di Mauro Group has expanded its New Zealand retail portfolio with the NZ$88.8 million acquisition of prominent Christchurch regional shopping centre The Palms, situated 4km north-east of the CBD.
CBRE’s Simon Rooney and Brent McGregor negotiated the off-market transaction on behalf of the AMP Capital Shopping Centre Fund in a deal that highlights ongoing domestic and Australian investor demand for New Zealand retail opportunities.
Rooney noted that three of the eight bidders for the asset were Australia-based, including the Di Mauro Group, which owns more than AU$1.4 billion in property assets across Australia and New Zealand, including the West City Shopping Centre in Auckland and the North City Shopping Centre in Wellington.
“New Zealand continues to gain traction as a retail investment destination, with offshore investors attracted by the country’s compelling investment fundamentals, including low retail supply per capita, ongoing strong population growth, robust retail turnover growth, low acquisition costs and an attractive yield profile,” Rooney said.
McGregor added, “Despite border closures and restrictions, investor interest in the New Zealand market remains high, with low interest rates enabling transactions to proceed. In the case of The Palms, the asset’s expansive and well-established total trade area population of 151,461 and significant retail spending capacity of $1.87 billion, together with the centre’s strong growth profile, were key investor draw cards.”
The 34,395m2 centre is anchored by leading retailers, including department store chain Farmers, Woolworths Group owned supermarket chain Countdown and Reading Cinemas, providing a major tenant WALE of 8.2 years.
Major, national and chain retailers occupy 80% of the GLA and account for 78% of the total gross rental income.
The centre occupies a significant and under-utilised site of 55,129m2 site, providing the opportunity for future mixed-use value-add development schemes subject to the relevant planning approvals.
The asset is also set to benefit from robust retail spending growth in the catchment area, which is forecast to increase by 2.5% per annum to reach $2.85 billion by 2036.