The Woolworths supermarket building in Ashburton, next door to Kmart, is for sale.
CBRE brokers Tim Rookes, Cameron Darby and Caiti Morgan are marketing the building via expressions of interest, closing October 31.
It is the second large commercial site along State Highway One in Ashburton to go up for sale in recent weeks. Tenders for a Tinwald shopping centre comprising 10 titles, including for SuperValue Tinwald, close October 24.
Darby said Woolworths NZ had demonstrated its confidence in the supermarket location by committing to a new 10-year lease, providing an outstanding passive holding with strong security of income for any new owner.
Owned by Woolworths NZ, the property is being sold under a sale and leaseback arrangement.
“We expect this asset to be highly attractive to investors as a long term, high-quality commercial holding with an exceptional tenant covenant, in an extremely high-profile location which services a vast customer catchment. The lease structure also ensures a low-risk, long-term income stream that is resistant to market downturns,” Darby said.
“This is an excellent opportunity for local and national investors to secure a recently-built prime asset, with a strong income stream derived from a non-discretionary retailing sector,” Rookes added.
The supermarket in the stand-alone freehold property, at 2 East St, had rapidly become the dominant supermarket in “the affluent Canterbury town” since being built in 2017.
It had an average annual turnover growth of 7.2 per cent over the past three years, and strong growth forecasts.
The lease to Woolworths generated more than $1.3m in base annual rental, and there was opportunity for rental growth built into the lease providing a secure income stream.
The Woolworths brand was well known and established in this location and offers a strong investment proposition backed by a large Australasian corporation, Morgan said.
“Purchasers can take a high degree of confidence from a tenant that is ultimately owned by Woolworths Group, Australia’s largest supermarket chain.”
Woolworths New Zealand was one of the country’s largest employers. Part of the ASX-listed Woolworths Group, it operated more than 185 supermarkets in New Zealand and employing 20,000 people.
Ashburton had traditionally been a farming hub serving an affluent rural population base with an average per capita income slightly higher than the South Island and national averages.
Steady development in and around the town over many years, including town centre commercial projects and a waterfront housing development at nearby Lake Hood, demonstrated the underlying wealth in the area, Rookes said.
“Ashburton is becoming recognised as a worthy destination for property investment, with more national investors now considering geographical diversification opportunities in the area alongside the existing strong depth of private capital that is active locally.”
