22 Dec DNZ in Second Stage at Westgate
DNZ in Second Stage at Westgate 22/12/2014
DNZ Property Fund Limited (DNZ) plans to develop a further 7,000m² of retail, dining and office space on land opposite its $155m Westgate Mall development, in a project known as “Westgate Stage Two”.
Westgate Stage Two will be a purpose built main street retail environment, opposite the Westgate Mall and surrounding the Town Square. Westgate Stage Two is also located adjacent to Auckland Council’s multi-purpose Library and Community facility which is planned for completion in 2016.
“Westgate Stage Two will be a complementary offer to our Westgate Mall development. It will provide greater critical mass, increased visitation and a broader range of categories for our customers, delivering higher total retail sales at Westgate” said DNZ CEO Peter Alexander.
“Additionally, the Westgate Stage Two project enables DNZ to curate the retail offer around the Town Square, and provide further dining options, which are an important part of a comprehensive retail offer.” Alexander noted that the momentum and market knowledge DNZ has gained through leasing its Westgate Mall will assist it to complete Westgate Stage Two. “Our Westgate Mall project is over 80% leased by budgeted income, which reflects the strong confidence that retailers have in the location and offer.”
DNZ has a right to undertake Westgate Stage Two as part of its original agreement to acquire the Westgate Mall land from Westgate Town Centre Limited (WTCL) in 2013. Under that agreement:
- DNZ can request the grant of an initial 35 year ground lease from landowner WTCL at no cost and there is no annual ground rental payable.
- WTCL can acquire the development within three years of DNZ taking the ground lease, at a price equal to 115% of DNZ’s total development cost, including holding costs.
- If WTCL does not acquire the development within the three year period, DNZ can obtain freehold title to the land at no cost.
WTCL has indicated that it disputes that DNZ is entitled to exercise this right to undertake the Westgate Stage Two development under the agreement. DNZ believes that the terms of the agreement are clear and does not agree that there is any matter capable of dispute. It may however need to take steps in order to enforce its rights in respect of Westgate Stage Two under the agreement.
The Westgate Stage Two project is at a preliminary planning phase. It is expected to cost approximately $30m and provide a minimum initial yield of over 7%. The exact timing of the project is yet to be finalised, but completion is anticipated before October 2016. DNZ will fund the development through the sale of non-core assets.
The addition of Westgate Stage Two will increase the net lettable area of DNZ’s combined investment at Westgate to 34,000m².
For Further Information Please Contact:
Tim Storey, Chairman, DNZ Property Fund Limited
Mobile: 021 633 089 – Email: firstname.lastname@example.org
Peter Alexander, Chief Executive Officer, DNZ Property Fund Limited
DDI: 09 913 1154 – Mobile: 0275 443 678 – Email: email@example.com
Jennifer Whooley, Chief Financial Officer, DNZ Property Fund Limited
DDI: 09 913 1150 – Mobile: 021 536 406 – Email: firstname.lastname@example.org
DNZ Property Fund Overview
DNZ Property Fund Limited owns one of New Zealand’s largest diversified investment property portfolios with $788.0 million (as at 30 September 2014) of commercial office, retail and industrial properties located in the main urban areas throughout New Zealand. As at 30 September 2014, DNZ Property Fund owned 45 properties with 286 tenants, a weighted average lease term (WALT) of 5.4 years and an occupancy rate of 99.00% over a net lettable area of 358,307m².
DNZ Property Fund Limited is a Portfolio Investment Entity in which investors hold shares and is managed by its own internal management team. DNZ is also the manager of Diversified NZ Property Fund Limited, a $115.9 million (as at 31 March 2014) commercial property fund.
DNZ’s top 10 tenants as at 30 September 2014: Bunnings, Progressive Enterprises (Countdown), Foodstuffs (PAK’nSAVE & New World), ASB, NZ Government, Fletcher Building, The Warehouse, Westpac, Meridian and Lion. These 10 tenants represent 50.2% of the Company’s total contract rental.