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William Pears to sell NZ$300m portfolio

The formal bidding process for the New Zealand supermarket portfolio will officially start next week.  

The William Pears Group, the London-based private real estate investment company has put up a portfolio of retail stores in New Zealand for sale. PERE has learned that the value of the portfolio, acquired by the firm in partnership with a private investor in the UK, is around NZ$300 million (€182 million; $199 million).

The portfolio consists of 19 supermarkets that are spread across New Zealand and currently leased to Progressive Enterprises, one of the largest grocery companies in the country. The formal bidding process for the portfolio, pegged to be among the larger-sized portfolio sales to have taken place in the country recently, will officially start early next week.

The assets are expected to generate interest among both domestic and global institutional investors and private equity real estate firms, especially those looking to make a foray into New Zealand. The bidding pool is expected to include Korean sovereign wealth funds and pension funds, the Australian superannuation funds and Canadian pension managers such as PSP Investments – a group with prior real estate investing experience in New Zealand, according to a person closely involved with the sale.

JLL and Colliers International are jointly handling the sales process. Colliers International’s New Zealand office would manage queries from domestic and Australian investors while JLL would handle international demand.

In a statement announcing the sale process, JLL said that the majority of the assets have 20-year leases that commenced in March this year.

“International investors are attracted to New Zealand’s transparent real estate markets and favorable long-term indicators,” said Stuart McCann, director, corporate finance and capital markets at JLL Asia Pacific. “However, accessing investments of this scale can be challenging. That’s why an opportunity to acquire 19 supermarkets, generating around NZ$700 million in turnover and offering a strong income growth profile, will attract significant interest.”

The country’s real estate sector has started attracting record levels of offshore investor interest, according to Stuart Crow, head of JLL’s capital markets business in Asia Pacific, with NZ$2.9 billion being invested in real estate transactions across the country by international investors last year. Some of the high profile deals included Singapore’s sovereign wealth fund GIC’s 49 percent stake in a joint venture partnership to acquire five shopping centers for NZ$1 billion in November 2014; and Canadian pension fund PSP’s acquisition of a portfolio of retail, industrial and commercial properties for NZ$1.1 billion in July 2014.