Hamilton's Centre Place North shopping centre likely to be sold, owner Kiwi Property signals

Monday, 20 May 2019

The Base in Te Rapa, Hamilton, Waikato's biggest shopping centre, is a thriving asset for its owners Kiwi Property and Tainui.

Kiwi Property intends to sell its underperforming Centre Place North in Hamilton though it has not placed the shopping centre on the market yet.

New Zealand's largest listed property company has $3.2 billion of shopping centres and office buildings.

Chief executive Clive Mackenzie said at the company's annual result for the year to March 31 2019 that the company had signalled Centre Place North would be an asset for disposal.

Hamilton's city centre had continued to be affected by competition from The Base shopping centre in Te Rapa, the largest in the region and owned by Kiwi Property in a joint venture with Tainui, and also by other retail sites.

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* Hamilton's Centre Place South sold for $46,8 million**

'The city is going through a negative contraction at the moment from a retail perspective,' Mackenzie said.

'Unfortunately that's reflected in the performance of that centre.'

Kiwi Property sliced $7 million off the value of Centre Place North at its annual property values reckoning in March. Centre Place North fell to $54m, an 11.5 per cent decline.

In 2015 Kiwi Property sold the other half of the shopping centre, Centre Place South, for $46.8m, saying the $120m mall complex was 'quite a large exposure to Hamilton CBD retail'.

Northlands Mall is the second largest shopping centre in Christchurch. Its owners Kiwi Property have recently completed an expansion of dining and entertainment space, called the Langdons Quarter.

Kiwi Property increased the value of The Base in March by 6.3 per cent to $218m, up $13m.

It's one of four Kiwi Property shopping centres which the company said had the potential for further mixed use developments such as a hotel, more entertainment, food and leisure providers and possibly medical services, overtime.

'All of these things will take time to come to fruition,' Mackenzie said.

'We increasingly see ourselves as creators of mixed use communities. We look to achieve this by intensifying our large land holdings to create a range of complementary uses,' he said.

Secondary retail centres were difficult to move. and that was no different from Australia and abroad, Mackenzie said.

'Fortunately our portfolio has been rebalanced a number of years ago so probably our only exposure is around Centre Place North.'

Kiwi Property also cut the values of The Plaza in Palmerston North by $6m, 2.9 per cent, to $207m in March and Northlands Mall in Christchurch by $15m, 5.7 per cent, to $247m.

Mackenzie said Kiwi Property was happy with the performance of Northlands and The Plaza.

'The Plaza is really the only game in town and Northlands is second in the market and so a strong performer from our perspective.'