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Lendlease fund lists two high-performing outlet centres in unique portfolio opportunity

The portfolio is being sold by International Expressions of Interest campaign closing Thursday March 17, 2022

Two of New Zealand’s best performing, premier retail outlet assets are expected to attract in excess of $300 million when they hit the market on behalf of Lendlease Real Estate Partners New Zealand (LLREPNZ) this week.

Colliers’ Lachlan MacGillivray (Managing Director of Retail Capital Markets, Asia Pacific) and Richard Kirke (Director of Capital Markets, New Zealand) and CBRE’s Simon Rooney (Head of Retail Capital Markets, Pacific) have been appointed to sell Dress Smart Onehunga (Auckland) and Dress Smart Hornby (Christchurch).

“Dress Smart Onehunga and Dress Smart Hornby are outlet centres trading under the ‘Dress-Smart’ banner – a well-known brand that has been part of New Zealand’s retail landscape for 24 years,” MacGillivray said. “Together, they offer a once-in-a-generation opportunity to immediately dominate the outlet market in New Zealand.”

Rooney added: “We expect significant interest domestically, from the Australian investment community and from a broad cross-section of offshore investors, underpinned by the globally attractive initial yield, low acquisition costs and high-quality income and capital growth profile, coupled with the fact that the properties are situated in the key Auckland and Christchurch markets.

Dress Smart Hornby is the South Island’s only dedicated outlet centre

“Both centres offer robust performance characteristics and have demonstrated trading resilience during downturns, more so than other retail sub-sectors, due to their discount-based offering.” From a tenancy perspective, New Zealand is an increasingly sought-after market with international and national retailers looking to expand their store footprints with a more targeted approach.”

Scott Mosely, Managing Director, Lendlease Investment Management, said: “Both centres have been strong performers for the fund with high-quality income growth. Dress Smart has been a well-known brand in New Zealand for the past 24 years with both centres offering a leading mix of international and national brands, along with future growth opportunities.”

Dress Smart Onehunga is the largest outlet centre in New Zealand

Dress Smart Onehunga, located only 8km south of the Auckland CBD, is the largest outlet centre in New Zealand, with a GLA of 13,293m2 on a total site spanning 22,103m2. The centre is home to 99 high-performing tenants with a leading mix of international and national brands including Adidas, Puma, Nike, Converse, Coach, Tommy Hilfiger and Calvin Klein.

The property offers significant development potential in the OneHunga Town Centre, an area identified by Auckland Council as a key site for development as part of a wider transformation and regeneration plan.

Dress Smart Onehunga is home to 99 high-performing tenants with a leading mix of international and national brands

Dress Smart Hornby is the South Island’s only dedicated outlet centre. It has a GLA of 7,136m2 and occupies a landmark 1.2ha site with frontage to Shands Road, Main South Road (State Highway 1) and Goulding Avenue.

With no direct outlet competition and excellent exposure to the greater Christchurch area, the centre serves a major trade area population of 491,470. The current tenant mix includes a high proportion of aspirational brands, fashion and sportswear – offering a complete outlet shopping experience.

The current tenant mix at Dress Smart Hornby includes a high proportion of aspirational brands, fashion and sportswear

Each centre is the number one performer in its respective catchment, and the portfolio offers strong income streams with future growth opportunities and expansion potential.

“The New Zealand economy has been remarkably strong for the last decade and was one of the first countries to raise interest rates – the NZ Official Cash Rate (OCR) was raised twice in late 2021 to 0.75 basis points,” Kirke said. “With the prediction of further increases, multi-tenanted assets with the ability to capture increases in market rents are experiencing increased investor demand.

“With their resilient trading history and an ability to add scale through further development, these Dress Smart assets will be an attractive opportunity for many.”

The portfolio is being sold by an International Expressions of Interest campaign closing 4pm New Zealand Daylight Time (NZDT) and 2pm Australian Eastern Daylight Time (AEDT) on Thursday March 24, 2022.

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