North Shore’s Glenfield Mall on the market
Glenfield Mall occupies a town centre site of nearly 4.5ha on Auckland’s North Shore. Photo / Supplied
The recently refurbished Glenfield Mall is for sale on Auckland’s North Shore, presenting investors with an opportunity to purchase a premium shopping centre in one of New Zealand’s fastest growing suburbs.
“The mall has exceptional retail fundamentals,” says John Goddard, Capital Markets Director at Colliers International which, in conjunction with Stonebridge Property Group, is marketing Glenfield Mall for sale via international private treaty closing at 4pm on Wednesday October 31.
Goddard says the property encompasses a 30,500sq m net lettable area on a prominent freehold town centre site of nearly 4.5ha (44.920sq m) that has long-term redevelopment prospects.
He says national retailers Countdown, Briscoes, The Warehouse, Warehouse Stationery and Farmers anchor the centre and are complemented by three mini-majors, five banks, 85 specialty shops, 12 kiosks, and a busy food court.
“The mall is 98 per cent leased, with the potential to earn an estimated net operating income of over $10 million on a fully leased basis. The four anchor tenants are all on long leases with expiry dates ranging between May 2027 and October 2035. Collectively, they account for 28.6 per cent of the centre’s gross passing income.
“The centre offers investors the stability of a weighted average lease term of 8.2 years, by area, underpinned by the very long leases to the four major tenants.”
He says the five-level centre has been well designed to integrate the two main retail floors with car parking for 1553 vehicles on four levels.
Goddard says the mall was originally built in 1971 and it has benefitted from significant vendor and tenant investment, including the introduction of Briscoes and a major refurbishment of the large Countdown supermarket in late 2017.
“The lower retail floor on level two is anchored by the new 4454sq m Countdown at the northern end and Briscoes leasing 3306sq m at the southern end, supported by a service-based tenant mix that includes banks and health and beauty outlets.
“The creation of the new generation Countdown consolidated its two strongly trading stores at opposite ends of level two into a single store, which has since been trading exceptionally well and is understood to be in the top 10 performing Countdown stores in New Zealand.”
As part of the consolidation, an agreement was reached to lease the vacated supermarket space to Briscoes, one of New Zealand’s leading retailers.
“Briscoes completed its first full month of trade in December 2017 and has consistently reported strong sales figures in 2018,” Goddard says.
He says the main retail floor on level three is anchored by Farmers with 5052sq m at the eastern end; The Warehouse and Warehouse Stationery tenant 5211sq m at the southern end; and a 350-seat food court at the northern end. Other tenants include fashion and jewellery retailers.
“The recent leasing of Zambrero, Pizza Hut and Little Things Coffee, on level five at the main Glenfield Rd entrance, led to a complete upgrade of the area and brought about a new vibrancy with the largely food and beverage presence supporting the already successful food court below.
“A new Cotton On Mega store leases 511sq m in the mall. The mega store concept is new to New Zealand and brings with it another large destination store of international quality.
“All these changes have successfully repositioned the centre to generate a substantial uplift in sales productivity, ensuring it is well-placed to serve an affluent, growing community into the future.”
Glenfield Mall draws upon a trade catchment of about 230,000 residents. An estimated 17,000 workers at the Wairau Business Park just 2km to the east of the shopping centre also contribute to the centre’s strong customer base.
Goddard says the mall has been exceptionally well maintained with significant redevelopments in 1999, 2006 and 2017. “The most recent refurbishment included a full rebranding and signage upgrade; comprehensive remedial and painting works; furniture and ambience upgrades; new centre management offices; the installation of closed-circuit television, electrical upgrades and a range of quality fit outs for new and existing tenants.
“In addition, the Glenfield Night Market held in the centre car park has become a very popular weekly destination for the wider Glenfield community on Sunday evenings.”
Goddard says that, in the longer term, investors have an opportunity to capitalise on the site’s Business Town Centre zoning, which allows for greatest density and height within suburban Auckland.
“A preliminary architectural feasibility study commissioned by the vendor envisages an extensive mixed-use redevelopment with apartments and further casual dining options complementing the existing retail outlets.
“Investors have a significant opportunity to evolve the study into a comprehensive masterplan, while continuing to draw on the centre’s secure income stream,” says Goddard.
Peter Herdson, Capital Markets National Director at Colliers, says Glenfield is well positioned to benefit from Auckland’s growth and the wider New Zealand success story.
“The suburb has been identified as a ‘town centre’ under the Auckland Unitary Plan, cementing its position as one of Auckland’s key transport and housing hubs; and Glenfield Mall is at its heart occupying a prominent, elevated site with convenient access to three street frontages. Located on the corner of Downing Street, the shopping centre has excellent frontage to the main arterial of Glenfield Rd which connects via other main roads to the Northern Motorway and Upper Harbour Highway - giving quick access to greater Auckland.
“It’s only 12km to Auckland city, 16km from the Ports of Auckland, and 30km from Auckland International Airport.”
Herdson says the mall benefits from being close to a range of community amenities including a library, pool, leisure centre and childcare centre, which act as secondary patronage drivers for the precinct.
Stonebridge Director Carl Molony anticipates substantial foreign investor interest in the sale of the mall.
“New Zealand is a highly sought-after investment location thanks to its strong economy and favourable foreign investment conditions, and for that reason is attracting worldwide interest,” he says.
“It is ranked second in the world for the competitiveness of its taxes, thanks in part to the lack of stamp duty. It is also the easiest country in the world to do business in, and the world’s third freest economy.”
Herdson says New Zealand’s economy has been growing for 33 of the last 35 years.
“As New Zealand’s largest and fastest-growing city, Auckland is the country’s economic powerhouse, contributing to 37 per cent of the country’s gross domestic product.
“Auckland’s population is forecast to grow by up to 66 per cent over the next 30 years, requiring the construction of some 400,000 new dwellings.
“Domestic and international migration remains a major contributor to this growth, particularly to Auckland.”
He says in the June 2018 quarter, retail spending in New Zealand was $22.9 billion – up 3.8 per cent ($834m) from a year earlier, of which Auckland accounted for some 37 per cent.
“As a result of these strong trading conditions, the retail vacancy rate in Auckland for shopping centres is a low 2.6 per cent.”
Goddard concludes by saying investors will appreciate the chance to acquire a signature asset with solid investment metrics.
“Auckland has become the New Zealand investment destination of choice and the sale of Glenfield Mall represents an opportunity to purchase a trophy regional shopping centre.”