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Lendlease fund selling New Zealand’s premier retail portfolio

The Lendlease Real Estate Partners New Zealand fund is set to sell New Zealand’s premier retail portfolio, which is expected to fetch a combined price in excess of NZ$350 million.

Colliers International and CBRE are managing the International Expressions of Interest campaign which commences in October 2019.

The portfolio includes outlet centres Dress Smart Onehunga, Auckland (13,217 GLA) and Dress Smart Hornby, Christchurch (7,117 GLA), together with Meridian Mall (16,028.4 GLA) - a retail asset in the centre of Dunedin’s CBD. The portfolio is being offered in one line.

“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,” said Matt Bowyer, Fund Manager, Lendlease. “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.

Each centre is the number one performer in its respective catchment, and the portfolio offers strong income streams with future growth opportunities and expansion potential.

“We expect to receive significant interest from offshore investors, who will be drawn to the globally attractive initial yield, low acquisition costs and quality growth opportunities each city’s demographic offers,” Simon Rooney, CBRE Head of Retail Investments commented.

“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,” Mr. Rooney added. 

This includes approximately NZ$60 million in general infrastructure upgrades and construction of the new Dunedin hospital, New Zealand’s largest ever hospital building, which is due to commence construction in 2020, at a cost of between NZ$1.2-1.4 billion. Longer term, construction activity over the next ten years is expected to exceed NZ$1.5 billion to facilitate the future growth of the Dunedin region.

New Zealand is receiving more enquiry from international retailers and national retailers are looking to expand their store footprints with a more targeted approach.

“Around the world, the outlet centre market is relatively small in terms of the number of centres and the number of investors and operators participating. Outlet centres have successfully closed the gap between full price retail and highly disruptive internet sales as they provide a level of investment diversification from traditional shopping centres,” said Mr. MacGillivray.

“This retail portfolio represents a ‘once in a generation’ opportunity to immediately dominate the outlet retail experience in New Zealand.”

Related Experts

Lachlan MacGillivray

Head of Retail Investment Services | Australia

Retail Investment Services

Sydney CBD

Specialising in the sale of major shopping centres, Lachlan has managed the sale of over $12 billion worth of shopping centres, working with a wide range of clients including institutional, international and private investors.

In 2019, Lachlan's team transacted 83% of all retail assets greater than $100 million, equalling a total of $3.58 billion in sales. These included:
The sale of Westfield Marion, SA for $670 million (50% interest);
The sale of Westfield Burwood, NSW for $575 million (50% interest);
The sale of Garden City Booragoon, WA for $575 million (50% interest);

Over the last 24 months, Lachlan has achieved the largest transaction in Australian history with the sale of Indooroopilly Shopping Centre, QLD for $810 million (50% interest). He also secured the largest agency negotiated transaction in Australia at $1.00 billion for the sale of Pacific Werribee and Epping, VIC (50% interest). With an in-depth understanding of shopping centre performance, Lachlan can provide you with expert advice on the sale and acquisition of your retail investments.
• Capital Partnering / Joint Ventures / Portfolio Transactions
• Asset Marketing and campaign strategy, implementation and execution
• Shopping centre acquisition and disposal
• Sale negotiation and transaction
• Strategic asset positioning and repositioning to maximise asset performance
• Buy side investment advisory

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