Retail Investment | $7,437,307 | Net Yield: 7.38% | NZ

This New Zealand retail investment secures a freestanding Woolworths supermarket in New Brighton, a coastal suburb around 5.5 km east of the Christchurch CBD. It is the only supermarket in New Brighton, positioned on a large freehold site with advertising frontage to Marine Parade and car park access from Hawke Street.

‍

At a purchase price of $7,437,307, the investment generates approximately $548,927 in net annual income, delivering a 7.38% net yield. The property is leased on a net basis to Woolworths New Zealand, a subsidiary of ASX-listed Woolworths Group Limited.

‍

The rent combines a base rent with a turnover component of 1.5% of gross sales above a set threshold. This gives the owner a share in the store's trading growth. Gross turnover at the store increased by 11% from 2022 to 2023 and by 5.2% from 2023 to 2024, with a further increase of around 4.8% estimated for 2025.

‍

As part of the purchase, terms were negotiated for an early lease renewal taking the term beyond eight years, a vendor contribution towards new flooring and lighting, and a store rebrand from Countdown to Woolworths.

‍

Woolworths is the leading supermarket brand in New Zealand, operating more than 185 stores and serving more than 3 million customers each week. A supermarket has traded from this site since 1981, and supermarkets are widely regarded as resilient assets because they provide an essential service through all economic conditions.

‍

The asset comprises 2,207 sqm of lettable area, built in the 1980s, with a substantial on-site car park. The rent sits below several comparable Woolworths stores in Canterbury on a per square metre basis, including Rangiora at $306 per sqm, Kaiapoi at $281 per sqm and Colombo Street, Cashmere at $305 per sqm.

‍

New Brighton serves as a commercial and residential hub for eastern Christchurch, with major housing developments under way in the area. The planned redevelopment of the adjoining New Brighton Mall is expected to bring new activity to the precinct, with the supermarket well placed as its anchor and to benefit from cross-shopping.

‍

As a New Zealand purchase, no stamp duty applied. Accounting for estimated purchasing costs, the net yield equates to approximately 7.22%. Based on an assumed 65% loan-to-value ratio and 6.5% annual interest rate, the property is projected to generate approximately $234,701 in annual cash flow after mortgage interest expenses, representing an estimated 8.49% cash-on-cash return on the total cash contribution of $2,765,966.

‍

These figures reflect acquisition modelling assumptions and are not guaranteed returns.

‍

With a blue-chip supermarket tenant, a turnover-linked rent, the only supermarket in its suburb and a 7.38% net yield, this investment reflects the calibre of commercial property Rethink Investing continues to secure for clients across New Zealand and Australia.

‍

About Rethink Investing
Australia & New Zealand's largest and most experienced commercial buyer's agency
$7 billion+ in commercial property secured for clients
Exclusive access to 70% off-market opportunities
Specialists in high-yielding commercial property investments