For the past six weeks we have been concentrating on our experience in Europe, we are going to summarise our opinion, but before we do, we should just focus on the domestic market and review what has been happening in NZ during this time. So here is an snapshot of NZ retail and property activities, during that period.
Multiplex it seems have been selling off its property portfolio in an attempt to realise gains and reduce debt. It’s a good time to buy if you’re in the market.
The sale of the Christchurch South Shopping centre in Colombo Street to local Christchurch Investor John Butterfield, and the 21 level, 23,000 sq metre office building at 80 Queens Street in Auckland tenanted to Deloitte and BNZ to Christchurch Investor Tim Glasson, seem like good buys for both. Certainly there must be some upside in each.
We also noted that Bunning’s have again been active, having achieved resource consent to buy land for a new store at Silverdale in Rodney District north of Auckland. They’re not quite so lucky however in Wellington at Paraparumu where they gained consent for a new store on the former golf driving range next to the airport, only to have it appealed by the Airport Company who have independently lodged for consent for a Mitre 10 store. It will be interesting to see the grounds of the appeal!!
Meanwhile it seems that Progressive Enterprises have picked a fight with locals at a small east Auckland Community, Beachlands. Progressive believe through their research that there is a need for a 3600 sq metre supermarket at Beachlands despite it having only a population of approximately 3600 people.
Locals say they don’t want it, as they believe it will affect local business people. This will be watched with interest as it is normally Progressive who are lodging appeals!! Meanwhile in Hamilton, Tainui were successful in defeating an attempt by Council to introduce a plan change, which may have impacted negatively on Tainui’s commercial expectations. Now the Council are appealing the decision to the High Court.
Oyster Property Group in Hamilton purchased a couple of solid properties from DNZ Property Group for $25.5 million. The properties were a Bunning’s Warehouse in NaeNae in Lower Hutt and the recently refurbished Colonial House in High Street Lower Hutt.
So what you might say? Well they syndicated the package, and there were reportedly, 118 x $100,000 shares sold and the offer was over subscribed by $700,000. This is a good indication that investors with relatively small sums to invest are keen still to support quality investment offerings.
Finally on the domestic market, we were interested to note that Cookie Time have decided to open a store in Camp Street Queenstown. This will be the first time that this quality Christchurch operation has opened a franchise outside of Christchurch in 21 years, maybe more to come?
We were also delighted to see that the Mad Butcher Peter Leach and Levenes David Levene were both made Knights of the realm. Congratulations to both, there are very deserving of these awards and have made very significant contributions to retail in New Zealand over a long period of time. Also to Kevin Rimmington CEO of the TSB Bank. Kevin has been in his role for many years and is deserving of his Companion of the NZM.
So what was our summary of Europe? First off we believe that our commercial opportunities in Europe remain very high. Whilst we can’t reveal the reason nor the opportunity for commercially sensitive reasons, it is fair to say that what we have to offer is not available in Europe!!
To recapture some of the key points that recipients may find interesting. Unemployment in most Eastern European Countries is very high, certainly 12% plus in most areas. This is not commonly known and is not reported as such as the EU does not want a further ingredient to impact on the already under pressure Euro.
In particular, Greece, Spain, Italy, and Portugal are under severe financial pressure. Other Countries like Germany and Holland are not happy at bailing out these countries, however all countries in the EU are committed to bailing out their member countries in economic hardship really whether they like it or not.
The major problem in the economic crisis is the fact that Greece and certain other countries have a problem with the funding of their retirement / superannuation packages. Greece has been particularly tardy in respect of taxation collection and early retirement benefits.
Some people retire as young as 52!! Consequently residents of Germany and Holland feel affronted at having to bail out their lazy neighbours. We believe this issue is very charged and could erupt.
It’s not common knowledge that the Czech Republic, only have about 5% of its population attend church. So what, you may say? Well the country is now predominantly Atheist. This has a big impact for the Catholic Church and Rome is endeavouring to “shore up” its representation in this country to try and reverse the trend.
It’s impossible to compare NZ with any European Country, we are, simply put, too small. What we should remember however is that there are certain trends that have emerged in Europe that are likely to have a bigger impact here than may be apparent.
Ever wondered why shopping is so good in Europe? Well, consumers have time and like relaxing and shopping and being entertained. Why is that? One reason why is that few Europeans have gardens and simply abandon domestic duties, or have chores done for them.
Imagine here not cutting your lawns or painting your house etc. All those weekend activities abandoned would give you more time to relax, and why not? Shopping centres in Singapore for example are pumping from 10am to 10pm 7 days.
So what can we learn? As shopping centre people we need to offer more and make changes to our environment regularly, not only when the pressure goes on. Here at RCG we have the answer to these issues and would be happy to accommodate a change for you – for the better, financially!
Back home, on Friday night last week (18th June) the Annual NZ Property Council Awards were announced in lavish fashion in the Great Room at the Langham Hotel in Auckland. Tickets are not cheap to attend the dinner and function, but its a credit to the Property Council in that they achieved again a very high attendance and the event is really the property event of the year.
The Supreme Award winner was the NZI centre in Fanshawe Street in Auckland, another very successful development by Newcrest Group Limited. This group seem to be developing a reputation for successful and winning developments.
One note of disappointment however is the group of attendees who just constantly talk during the awards ceremony making it difficult for others to hear. Given the cost of tickets, one ponders why they bother to attend!
Burger Fuel Shares 2008 to 2010
Sharewatch
BurgerFuel reported its full year results last week, with New Zealand sales up 34.7% to $3.99 million from $2.96 million the year before. A burger fuel store opened in Misson Bay in this period, bringing the total number of stores in New Zealand to 27.
This is BurgerFuel’s first full year report since it launched in Saudi Arabia, and reports a $553,000 loss- an improvement of 22% from the $710,000 loss in 2009, and $2,149,000 loss in 2008. The good news continues. Share prices have increased since mid 2009, sales are growing, and the Saudi Arabia store was successful, earning $369,000 sales for the 8 weeks to 31 March 2010.
Unlike most other retailers, expansion in Australia has become a lesser priority for BurgerFuel. Now that they’ve conquered Saudi Arabia, the next target is Dubai, which is being planned to open by July. New store rollouts in Saudi Arabia and Dubai, and increasing sales in New Zealand- the company’s next reports are to be keenly awaited.
NZ Retail News
Big business threatens to kill dream lifestyle
Beachlands is only 40 minutes from central Auckland, but it has retained the characteristics of a seaside town, becoming a haven for young families looking for an escape from city living.
But with three large developments on the cards, this sleepy community may soon be transformed into a concrete urban jungle.
(Source: NZ Herald)
Sandringham Retail looks Promising for Medium Term
A Sandringham multi-tenanted retail investment property offering medium-term rental growth will be auctioned next Tuesday by CB Richard Ellis.
A dance studio, tyre shop and supermarket lease 1410sq m of the two-storey industrial style building which is within a bigger complex divided into four unit titles.
(Source: NZ Herald)
Stock takes: Fast food firm waiting for Pick-up
Burger Fuel waited until late Monday to announce its full year result – another loss – although it was not as bad as the previous 12 months.
The burger bar company with global ambitions lost $553,000 in the year to March, but in a glimmer of hope that’s a 22 per cent improvement on the previous loss.
(Source: NZ Herald)
Retail giant wins fight over New Supermarket
Supermarket operator Progressive Enterprises has claimed a huge Environment Court victory over its controversial plans for a Countdown at Warkworth.
Progressive’s development manager for properties, Brady Nixon, said Judge Jeff Smith made an oral decision this week allowing the development to proceed.
(Source: NZ Herald)
Dan Carter closes fashion stores
Even All Black Dan Carter is not immune to tough times, with his GAS fashion chain closing two stores in the face of poor sales.
Carter half-owns GAS Clothing New Zealand, which sells the upmarket Italian clothing brand exclusively through stores in Christchurch, Wellington and Mt Maunganui.
(Source: insideretailing.com.au)
Secrets now widely known
Jeweller Secrets will celebrate its 10th anniversary this month.
The world’s largest diamond simulant retailer has 20 stores across Australia and New Zealand.
The first half of the decade marked a period of rapid growth for Secrets, with 15 new stores opening.
(Source: insideretailing.com.au)
Bunnings and Woolies’ DIY battle
Bunnings has fired the opening shot in its looming billion-dollar hardware battle with Woolworths, accusing the supermarket giant of thwarting planning and zoning laws to avoid outside scrutiny as it pushes ahead with its national rollout of big-box hardware stores.
In a blistering assault on Woolworths and its plans to initially set up its first 11 hardware outlets in Victoria, Bunnings claims the retailer and its US joint venture partner Lowe’s were getting a ”free kick” and a ”valuable gift” from the rezoning of industrial land to be used by the duo.
(Source: stuff.co.nz)
Rare: Farmers reveals sales
NZ department store, Farmers, says late May’s sales were “extremely good”, and well ahead of the same time last year, after cooler weather arrived.
Sales were well ahead for beauty, perfume, cosmetics, fashion clothing, underwear and homewares, the privately owned department store chain said.
(Source: stuff.co.nz)
