Countdown syndication available in Auckland

Media Release
19/11/2010

Countdown syndication available in Auckland

Following the success of the syndication of a Tauranga property tenanted by a Countdown supermarket, investors are now being offered an ownership slice of a similar Countdown building in Auckland.

A total of 192 individual proportionate title shares of $50,000 each are being offered in the 5,294m² sq m building in the Westgate Shopping Centre in West Auckland. The investment will provide purchasers with a proportion of the registered freehold title in the property’s land and buildings and an initial projected income return of 8.5% per annum.

Augusta Funds Management has entered into a contract to acquire the supermarket property for $16,340,000 from the developer of the Westgate centre New Zealand Retail Property Group (NZRPG).

Augusta was also the offeror of a recent proportionate title ownership scheme of a Countdown supermarket in the Fraser Cover Shopping Centre in Tauranga which closed significantly oversubscribed.

Augusta Group managing director Mark Francis says there is no doubt the property’s long lease to one of the New Zealand’s two major supermarket chains struck a chord with investors and there were a substantial number who missed out on the Tauranga offering.

“The Westgate property is very similar, with a 15-year lease over one of Countdown’s latest new-format supermarkets. It is also anchors a large shopping centre which services a wide residential catchment in a rapidly growing area.”

The Westgate Countdown has 13 years to run on its lease from December 2008 to General Distributors Ltd, a wholly owned subsidiary of Progressive Enterprises Limited. Progressive employs more than18,000 people in New Zealand across more than 160 retail sites as well as several meat processing plants, warehouses and support offices. It is part of Australian listed company, Woolworths Limited, which has a market capitalisation of approximately AUD$34 billion.

Augusta Funds Management which will manage the Countdown property on behalf of investors has been providing these types of investment vehicles since 2001 and now has over a $250 million worth of property funds under management. NZRPG will continue to manage the overall Westgate centre located at the end of Auckland’s North Western Motorway which is the start of State Highway 16.

Augusta has appointed Mike Houlker and David Gubb of Bayleys Auckland, who also handled the marketing of the Tauranga Countdown scheme, to sell the proportionate title interests in the Westgate offering.

Houlker says Westgate is one of New Zealand’s largest open air shopping centres with high exposure to a substantial volume of passing traffic, with the motorway providing easy access to and from the centre. It is also located in an area that has experienced expansive growth, both economically and demographically over the past decade.

This is likely to get a further major boost from the continuing redevelopment of
Hobsonville Airbase into what will be known as Hobsonville Point. The community,
planned to be developed over 25 years will include 3,000 residences as well as
schools and early childhood education centres. The development is within 10 minutes drive of Westgate Shopping Centre. Houlker says there are also substantial areas of former rural land close to Westgate that have been earmarked for major business development in the future.

He says Countdown has also made a substantial investment in the building it occupies, with a significant $4million upgrade of the premises two years ago. In addition to the initial 15 year lease, it has three rights of renewal of six years each which would take the lease’s final expiry through until 2041. The rental is reviewed every 3 years to market, with the first review scheduled for December 2011.

“The property provides all the fundamentals that investors are looking for - a quality building, a good location and, in particular, a strong tenant covenant – and we are expecting strong interest in it,” says Houlker.

Bayleys has established a dedicated website for the marketing of the property (www.investinwestgate.co.nz) which include the full offeror’s statement for the investment and a copy of the property’s registered valuation.

ends

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