Australian rich-lister buys Porirua's North City mall for $100m
Wednesday, 11 April 2018
Kiwi Property has announced its sale of the North City Shopping Centre in Porirua for $100 million, to Australian rich-lister Nick DiMauro.
The sale was slightly below an independent valuation done on the centre in March this year which valued it at $106m, the company said.
The Porirua mall will be the Adelaide-based property tycoon's second shopping centre purchase in New Zealand.
In February 2017, DiMauro's company, Angaet Holdings, bought the Westfield WestCity shopping centre in Auckland's Henderson from Scentre group for $250m.
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Angaet owns more than 20 shopping centres in Australia, DiMauro said.
'We believe North City is a vibrant centre and it presents well in our portfolio.'
He did not rule out the possibility of purchasing more shopping centres in New Zealand.
'We're always looking and New Zealand is a very nice place to invest in.'
DiMauro was named on the Australian Financial Review Rich List last year with a net worth that has almost doubled since 2013. He is now worth about A$530m (NZ $558m).
Kiwi's chief executive Chris Gudgeon said the sale proceeds would be used to pay down bank debt.
'North City had been identified for sale as part of our capital recycling programme designed to fund current investment priorities,' he said.
The sale was brokered by CBRE. CBRE Wellington's managing director Matthew St Amand said it was a significant sale that highlighted ongoing confidence in the Wellington region on the back of the recent sale of the Majestic for Kiwi Property Group.
Kiwi Property, which manages a $3.1 billion property portfolio, also sold Wellington's Majestic Centre for $123.2m in November to South African company, Investec.
Gudgeon said the Porirua sale was due to settle in July.
'It's a good little shopping centre but we can't own everything,' he said.
'We're investing of $300m towards development at the moment, including the work at Sylvia Park in Auckland, so we needed to refocus on our more strategic asset.'
In April last year, National Property Trust shareholders rejected a proposal to purchase the Majestic Centre for $119m and North City for $111m.
NPT owns Eastgate Shopping Centre in Christchurch, a mall in Auckland, plus three commercial properties, and is among the smallest and poorest performing property companies on the Stock Exchange.
In the proposal to shareholders, an independent valuation listed the worth of the Porirua mall at $114m.
North City opened in 1990, and has 102 tenancies including Kmart, Farmers and a Reading Cinemas as well as more than 1100 car parks.
Two years ago North City managers told Porirua City Council they feared the Transmission Gully expressway would divert traffic away from the centre.
The sale does not include two vacant shops on Lydney Place next to the shopping centre. Their building has a nearly earthquake-prone rating of 34 per cent of the new building standard (NBS).
Two carparks at the shopping centre were recently strengthened from 25 per cent NBS to a 'low risk standard', Gudgeon said.
John Polkinghorne of retail consultancy RCG said Kiwi Property seemed to have a strategic focus on Auckland retail spaces with offices, which was freeing up space for new players to enter the market through smaller malls.
Polkinghorne saw the sale as a 'vote of confidence in the industry and the sector' and a good deal for both parties.
'You don't tend to get transactions happening if there's not a lot of confidence.'