Lendlease is set to sell a portfolio of three retail properties in New Zealand, owned through its Real Estate Partners New Zealand fund, and the deal is expected to fetch more than NZ$350 million ($325 million).
The portfolio, which is being sold in one line, comprises two outlet centres – Dress Smart Onehunga in Auckland and Dress Smart Hornby in Christchurch – and Meridian Mall, a retail asset in the Dunedin CBD.
Lendlease fund manager Matt Bowyer said the properties had performed well for their investors but the fund had been created for a fixed term.
The retail centres, which are being sold through Colliers International and CBRE, are the top performers in their respective catchments.
“We expect the portfolio will be strongly sought after by domestic and international parties given the assets’ strong fundamentals, long-term financial performance and strategic locations in each city,” said Lachlan MacGillivray, Colliers head of retail investment services.
He said the outlet centre market around the world was relatively small in terms of the broader retail segment but they were plugging a hole between full-price retail and internet shopping, and giving investors a level of diversification from traditional shopping centres.
Simon Rooney, CBRE head of retail investments, said offshore investors were likely to be attracted to the initial yield, low acquisition costs and opportunity for growth given the demographics of each city.
“While Christchurch and Auckland are well-known investment destinations, the Dunedin asset will also be highly sought after due to the initial yield, CBD location and the council’s significant infrastructure investment in healthcare and education,” he said.
Lendlease acquired the portfolio, which included another Dress Smart outlet in Wellington, from ING for $197 million.
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