09 Sep Work commences on NorthWest Two development
Work commences on NorthWest Two development 9/09/2015
DNZ Property Fund Limited (DNZ) has commenced construction of its ‘NorthWest Two’ (previously referred to as Westgate Stage Two) development on land opposite its NorthWest Shopping Centre. The NorthWest Shopping Centre’s construction is nearly complete. The retail portion of the development is fully leased and will open on 1 October 2015.
NorthWest Two is a complementary and important part of the overall Westgate Town Centre. It will comprise four separate buildings providing around 7,700m² of additional dining, retail and office space in a purpose-built main street retail environment.
DNZ’s Chief Executive, Peter Alexander, says that NorthWest Two will provide greater critical mass, encourage increased visitor numbers and offer a broader range of shopping categories for customers.
“Ultimately this project allows us to curate the retail offer around the town square, resulting in higher total retail sales at NorthWest. It also allows us to provide further dining options that are an important part of our comprehensive retail offering”, Mr. Alexander said.
DNZ has signed a conditional agreement to lease with a multi-national company for 2,200m² of office space in the new NorthWest Two development. The agreement means that 25% of the expected annual rent for the NorthWest Two project is conditionally secured.
DNZ has selected Fletcher Construction Company (Fletchers) to build the NorthWest Two development. Fletchers is currently completing construction of the Northwest Shopping Centre.
DNZ estimates that NorthWest Two will cost around $37m to complete and that it will give a minimum yield of 7%. Project completion is anticipated in October 2016. DNZ expects to fund the NorthWest Two development through the sale of non-core assets.
In December 2014, DNZ announced that it had stepped-in to complete the NorthWest Two development, as Westgate Town Centre Limited (WTCL) had failed to deliver agreed project milestones. At that time, WTCL disputed DNZ’s right to undertake the NorthWest Two development.
WTCL has now withdrawn its dispute about the validity of DNZ’s step-in. WTCL has commenced arbitration proceedings about aspects of DNZ’s NorthWest Two building design. The central issue in the arbitration is how large one of the four NorthWest Two buildings is required to be. WTCL has also indicated to DNZ that it may bring interim relief proceedings regarding that building. DNZ is confident that its NorthWest Two plans meet all relevant requirements, including those under the arrangements that it has with WTCL.
DNZ looks forward to completing the arbitration and to resolving finally all matters arising from WTCL’s failure to deliver the project milestones.
NorthWest Shopping Centre Update
- NorthWest Shopping Centre, at the heart of the new Westgate Town Centre, will be Auckland’s newest regional shopping centre and is part of New Zealand’s largest urbanisation project.
- Retail shops in the NorthWest Shopping Centre development are fully leased.
- The NorthWest Shopping Centre will open on 1 October 2015.
For Further Information Please Contact:
Tim Storey, Chairman, DNZ Property Fund Limited
Mobile: 021 633 089 – Email: [email protected]
Peter Alexander, Chief Executive Officer, DNZ Property Fund Limited
DDI: 09 913 1154 – Mobile: 0275 443 678 – Email: [email protected]
Jennifer Whooley, Chief Financial Officer, DNZ Property Fund Limited
DDI: 09 913 1150 – Mobile: 021 536 406 – Email: [email protected]
DNZ Property Fund Overview
DNZ Property Fund Limited (“DNZ”) owns one of New Zealand’s largest diversified investment property portfolios with $872.4 million (as at 31 March 2015) of commercial office, retail and industrial properties located in the main urban areas throughout New Zealand. As at 30 June 2015, DNZ owned 42 properties with 291 tenants, a weighted average lease term (WALT) of 5.4 years and an occupancy rate of 99.1% over a net lettable area of 337,568m².
DNZ Property Fund Limited is a Portfolio Investment Entity in which investors hold shares and is managed by its own internal management team. DNZ is also the manager of Diversified NZ Property Fund Limited, a $118.4 million (as at 31 March 2015) commercial property fund.
DNZ’s top 10 tenants as at 30 June 2015: Bunnings, Progressive Enterprises (Countdown), Foodstuffs (PAK’nSAVE & New World), ASB, NZ Government, The Warehouse, Fletcher Building, Westpac, Meridian and Lion. These 10 tenants represent 51% of DNZ’s total contract rental.