By Chris Hutching
Friday 4th October 2002 |
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Kiwi managing director Angus McNaughton said yesterday he was talking with PRG about its existing stores and how it could benefit from the expansion plans. The stores are key tenants along with Farmers, Pak 'N Save, The Warehouse, Hoyts Cinemas and Countdown.
The redevelopment will expand the 20,785sq m to 40,700sq m, although some of the additional space involves incorporating The Warehouse, Hoyts Cinemas and Countdown into the mall from their position over the road.
Another national retailer making bullish noises about building more stores Harvey Norman was unlikely to be included because it tended to favour standalone locations, Mr McNaughton said.
One of the challenges for Kiwi is to lift the number of specialty stores from 70 to 120 but Mr McNaughton said leasing interest was strong.
A fashion precinct would be the focal point of the redeveloped centre, with mainstream brand fashion retailers and new retailers to the region creating a point of difference.
Northlands is one of four regional shopping centres owned by the property trust. The others are in Hamilton, Palmerston North, and Porirua (Wellington).
The proportion of retail assets in the trust's total portfolio will rise from 40% to 47%.
Mr McNaughton said turnover at the centre was $168 million and he expected an increase of $60 million in turnover (excluding Countdown and The Warehouse) to make the deal stack up.
Kiwi will be competing on the Christchurch retail scene with several other shopping centres being expanded and refurbished, such as The Palms and Eastgate where $50 million enlargements are under way.
Westfield has also indicated it will expand Riccarton Mall soon with a $110 million programme.
But Mr McNaughton said each centre had its own catchment and the company's market research indicated there was little overlap.
Turnover growth had been strong on a year on year end basis ending August, up 12%.
He predicted Northlands, Riccarton and the city centre would be the main shopping precincts in Christchurch.
The property trust recently raised $69 million through a rights issue to existing shareholders to fund Northlands.
The balance will come from bank debt, making the ratio of bank debt to total assets to 29.3%.
Kiwi's flagship $201 million Royal & SunAlliance Centre in Auckland recently leased its last space, while the $33 million Pricewaterhouse-
Coopers Centre in Christchurch has only half the top floor vacant. In Wellington Kiwi owns Majestic House, valued at $71.5 million, and BP House, valued at $22.3 million.
In the year ended March 31, Kiwi reported an after-tax profit of $43.36 million, up 22.5% from the previous year, largely as a result of the acquisition of the Royal & SunAlliance Centre. Rental income rose 33.7% to $71.82 million. The total distribution per unit was 10.15c, including 0.16c in imputation tax credits.
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