Big box retail opportunity in Blenheim

A bulk retail property with two high profile tenants on the outskirts of Blenheim has been placed on the market for sale by its developer owners.

As returns for the large format retail sector of the New Zealand commercial property market are outpacing all other asset classes, competition is expected from investors for an A-grade offering on the outskirts of Blenheim.

The Kmart-anchored and Chemist Warehouse-supported bulk retail property in the evolving Westwood Business Park in Springlands, has been placed on the market for sale by its developer owners Outer Limits as it embarks on other projects within the Marlborough region.

The property at 5-9 Westwood Avenue has 5101 square metres of lettable space across the two core tenancies, along with a 185-sqm attached building occupied by cafe´, Catalyst Eatery.

The steel-framed bulk retail building has pre-cast concrete tilt panel exterior walls and Kingspan insulated panel roofing.

It features capacious main retail areas, back-of-house storage areas, plus an amenity block housing staff facilities and also administration space.

The Westwood property returns a passing net income of $1,055,149 per annum, with Kmart having a 10-year lease, Chemist Warehouse eight years and Catalyst Eatery a six-year lease, with rental growth provisions built into each of the leases.

Mark Hourigan of Bayleys Wellington Commercial is heading the sales campaign, along with colleagues Glenn Dick of Bayleys Marlborough and Ryan Johnson, Bayleys Auckland Central.

The property will be sold by tender, closing with Bayleys Wellington at 4pm Wednesday 8th December, unless sold prior.

Hourigan said the large format retail sector has proven resilient in the face of pandemic disruptors and was the top-performing asset class according to the MSCI property index, showing a 22.4 per cent total return for the 12 months to March 2021.

‘‘As an asset class, large format retail has defensive fundamentals, demonstrates counter-cyclical market attributes, and has a low-risk investment profile,’’ he said.

‘‘As a retail segment, it’s been bolstered by a significant increase in consumer spending throughout the pandemic as these large format store operators have had the resources and business infrastructure to pivot and adapt quickly.

‘‘The big players in the retail market have fared extremely well in the past 18 months which gives confidence to investors.’’