DIY retail dynasty places Mega store up for sale

DIY retail dynasty places Mega store up for sale

Caption: Mitre 10’s impressive Blenheim retail outlet.

Blenheim’s largest bulk retail property – the massive family-owned 10,000 square metre Mitre 10 MEGA store – is on the market for sale.

The imposing outlet on the south-eastern outskirts of town was built three years ago by father and son building trade entrepreneurs Graeme and David Hawtin. Dedicated DIY builder and businessman Graeme Hawtin has been involved with the Mitre 10 brand since it was first brought to New Zealand – moving the franchise operation some five times around Blenheim as the business steadily continued to grow.

Within the 10,000 square metre building footprint in Blenheim is 4,698 square metres of retail and café space, a 3,130 square metre drive-through timber and hardware depot along with an inwards goods delivery yard, a garden centre, and 498 square metres of mezzanine and ground floor office space. The building sits on 1.86 hectares of land and has more than 200 car parks.

The property is leased to Mitre 10 New Zealand Ltd for 15 years from 2007 - with three further five year rights of renewal. It currently generates a net rental of $1.08million plus GST per annum, with operating expenses in addition. The property is being marketed by Bayleys Marlborough. Registrations of interest close on April 16.

Sales consultant Grant Baxter of Bayleys Marlborough said Mitre 10 has been a household name in the New Zealand retail DIY and building trade supplies markets since the brand was introduced to this country in 1974. There were now more than 130 Mitre 10 stores throughout New Zealand operating under the branding banner - with Mitre 10 voted “Most Trusted Retail Brand” in a 2008 Readers’ Digest survey of Kiwi households.

The larger scale Mitre 10 Mega brand - with its on-site cafes, children’s play areas, and substantial garden centres - was launched in New Zealand in 2004. There are now more than 20 Mega stores – of which Blenheim is one – throughout the country.

“Graeme and David Hawtin developed the Blenheim property form bare land, and will continue to operate the business as sub-tenants of Mitre 10 New Zealand Ltd. After more than 30-years of building up businesses, with this operation as the pinnacle of those achievements, they are now looking at new investment opportunities – both within the region, and elsewhere in the South Island,” Mr Baxter said.

“As with all Mitre 10 Mega businesses, the Blenheim site is extremely visible – utilising a substantial street frontage, in a high traffic volume location.”

Mr Baxter was confident the Blenheim Mitre 10 Mega sale would mirror a similar campaign in Auckland last year which saw the similarly designed Mitre 10 Mega outlet in the suburb of Henderson successfully sell for $20million. Also like Blenheim, the Mitre 10 Henderson property was sold by family interests with the vendor then subleasing the property back from Mitre 10 New Zealand Ltd.

“The Blenheim property is being marketed nationwide by Bayleys as the leading real estate investment opportunity in the region - because of its size, the long length of the lease to run, and the impeccable reputation of both the head lease, Mitre 10 New Zealand Limited, and the sublease holders, the Hawtin family,” Mr Baxter said.

“Linking these factors together - with a current rental income of some $1.080million and working on a rental yield of about eight percent - this values property somewhere in the region of $13million. For that reason, it’s expected the buyer will come from outside the Marlborough region, and could likely be a syndication of investors pooling funds and looking for what would be a close to a ‘guaranteed return’ for an investment of this nature.

“When cashflow and security of income are important, investors should seriously consider an opportunity of this size.”

The retail complex was built in 2007 on reinforced concrete foundations, with pre-stressed concrete tilt slab external walls and a Zincalume clad roof. Interior linings are predominantly Gibraltar board with suspended acoustic panel ceilings and recessed diffused lighting. Various automated sliding doors and electric motor operated roller doors provide access to the interior yards, with a two metre-plus high security fence encircling the perimeter.

ENDS

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