Dress Smart outlets, Dunedin mall for sale

Dress Smart Onehunga is one of the outlets for sale in the portfolio.

A portfolio of three market-leading retail properties, comprising Dress Smart outlet centres in Auckland and Christchurch and Dunedin’s premier Meridian Mall, is for sale.

Lendlease Funds Management Ltd has appointed Colliers International to market the portfolio for sale in New Zealand. CBRE Australia, together with Colliers International, will market the properties offshore.

“These properties have performed well for our investors, but the fund was created to run for a fixed term and that has triggered the sale process,” says Lendlease manager Matt Bowyer.

“We expect the portfolio will be strongly sought by domestic and international parties, given the assets’ strong fundamentals and long-term financial performance.”

John Goddard, of Colliers’ New Zealand capital markets team, says the strength of the Dress Smart brand has resulted in the Onehunga centre being an outstanding performer.

“The portfolio provides immediate scale with an overall gross lettable area of 36,362.4sq m. The total portfolio is expected to attract interest in excess of NZ$350 million.

“This is a unique opportunity to dominate the outlet market in New Zealand while investing in the best shopping centre in the lower half of the South Island.”

Richard Kirke, international sales director at Colliers New Zealand, says the Onehunga outlet centre is in a futureproof location, thanks to continuing high-level plans by Auckland Council for the transformation of Onehunga.

“Recent investment in a new train station, road improvements, the main street and Taumanu Reserve has created impressive urban regeneration in Onehunga and its surrounds.

“Median house prices have more than doubled from 2012-2019 and prices will continue to rise given the re-gentrification being undertaken. Also in time the proposed east-west motorway link and light rail link from the airport to the Auckland CBD will further improve accessibility.”

Dress Smart Onehunga opened in 1995 and is at 151 Arthur St. It has a gross lettable area of 13,217sq m on an 18,858sq m freehold site with 735 car parks and Business Town Centre zoning. The centre has 99 per cent occupancy as at July 2019, with 101 tenants in total.

Dress Smart Hornby in Christchurch is the South Island’s only dedicated outlet. Its high-profile location along State Highway 1 has strong exposure to passing traffic.
“With no direct competition, the centre serves a trade area population of 465,694. This is significantly broader than traditional shopping centres,” says Kirke.

Hornby is a major residential and retail suburb at the western edge of Christchurch, only 7km from the CBD and 11km from the airport.

Its affluent residential population includes a high proportion of families. This, coupled with strong population growth, provides a demographic that associates strongly with outlet shopping centres as they look for value options.

Dress Smart Hornby is part of a broader, complementary shopping destination that includes The Hub Hornby, a Countdown supermarket and a range of large format retail stores.

The centre opened in 1998 and is at 409 Main South Rd. It has a gross lettable area of 7117sq m on a 12,195sq m site with 347 car parks and Commercial Core zoning. It has 99 per cent occupancy as at June 2019, with 53 tenancies including 47 specialty shops.

Lachlan MacGillivray of Colliers International Australia says: “Given the properties offer geographic and sector diversification, with proven sales growth over a long period of time, there is likely to be a broad buyer base for these assets. There is global investment demand for outlet centres.”

Kirke says Christchurch and Auckland will typically be well known to offshore investors. “Dunedin is less well known, but nevertheless will be attractive due to its population growth and the council’s significant infrastructure investment in both the hospital and its CBD.

“The Meridian Mall sits on nearly 1ha of prime CBD land. Opened in 1997 the centre is the dominant retail centre for a growing primary catchment of 126,000 people, according to a recent IQ report.

“Anchored by Kmart, JB HiFi and well-recognised South Island department store H&J Smith, the centre enjoys being in the hub of the ‘Golden Block’ main trade area. Here, retail spending power is estimated at over $2 billion.”

Meridian Mall is at 285 George St. It has a gross lettable area of 16,028.4sq m on a 9398sq m site with 650 car parks. The centre has 95 per cent occupancy as at June 2019, with 65 tenancies.

Simon Rooney, of CBRE Australia, says commercial real estate continues to be sought as its risk-adjusted returns remain attractive.

The closing date for offers is 4pm Thursday, November 21.