Macquarie CountryWide Trust has sold a 50% interest in its New Zealand portfolio for $NZ103.5 million ($A89.6 million).
The portfolio has been sold to a private European investment company and the price is a 68% gain or $NZ42.1 million ($A36.5 million) over the acquisition cost base for the 50% interest. The sale price negotiated represents an initial yield of 6.6%.
The transaction comprises 18 of the trust’s 19 New Zealand freestanding supermarkets.
MCW’s chief executive Steven Sewell said the transaction has allowed investors to realise attractive investment profits while maintaining asset control and geographic diversification.
“This transaction has enabled us to realise capital gains on these sought after assets while retaining exposure to their future growth potential,” he added.
MCW will initially use the sale proceeds to pay down a substantial portion of its New Zealand debt. The increased borrowing capacity will enable the trust to provide ongoing funding for the development pipeline and potential future acquisitions in existing or new markets.
Macquarie CountryWide first entered the New Zealand market in September 2000, purchasing 13 properties from Progressive Enterprises (which has since been acquired by Woolworths Ltd) in a sale and lease back arrangement.
The portfolio grew to 19 assets over the last six years and has delivered over 4% comparable net operating income growth on average each year since.
“The portfolio’s strong growth in value reflects our ability to build relationships with anchor tenants and enhance asset quality to improve trading performance,” Sewell said.
The deal remains subject to New Zealand Government Office of Overseas Investment approval which is expected in the near future.
This sale is the second major disposal MCW has undertaken. Yesterday, the trust finalised the sale of the initial trance of its First Washington properties portfolio in the United States for $US98 million ($A125 million).
By Adam Parsons
