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AMP Henderson Private Capital Sells Dress-Smart

AMP Henderson Private Capital Sells Dress-Smart

The Dress-Smart retail portfolio of three factory outlet centres has been unconditionally sold by AMP Henderson Global Investors Private Capital.

This is one of New Zealand’s largest retail portfolio sales in recent years and was offered via international tender by Colliers International. The Colliers International team who sold the property comprised Rosemary Bradford, Bill Leckie, John Goddard. The sale price has not been disclosed. The purchaser is a major Australian institution.

“It’s been great to see the strong interest in Dress-Smart over the last few months and I’m delighted to be able to now announce its sale,” said Martin Turner, head of AMP Henderson Private Capital.

“Dress-Smart has been a very successful private capital investment for us. In addition to the property strength of the investment, Dress-Smart has a terrific management team led by Mark Schiele who played a major role in the development of the business since its inception.

Dress-Smart has centres in Onehunga Auckland, Tawa Wellington and Hornby Christchurch and is recognised as the dominant sector player here. It has 142 retail tenancies comprising top brands including Nike, Line 7, Country Road, Oroton, Hallensteins, Outdoor Heritage and Max Fashions. The annual turnover of the portfolio is in excess of $86 million with a net income well in excess of $6 million.

Dress-Smart started in Auckland in 1995 and has enjoyed rapid growth in response to strong retail demand. The Christchurch centre opened in 1998 followed by Wellington in 1999.

The factory outlet mall concept originated in the United States in the 1970’s where it was used by manufacturers to control excess stock and minimise losses, by clearing the stock overruns and seconds at heavily discounted prices. As the concept matured they became profit centres in their own right. This pattern has been repeated in New Zealand.

“We are confident Dress-Smart will show further growth for the new owners. This sale is consistent with our investment philosophy of entering early in the growth phase and exiting after three to five years,” said Mr Turner.

“We made four private capital investments in 1998 – our first year of our private capital operations in New Zealand. With the sale of Dress-Smart we have now exited all of these investments showing a very strong return to our investors on each investment. We continue to seek new investments,” he said.

Speaking on behalf of Colliers International, who marketed the property for sale Rosemary Bradford said, “the portfolio was tendered internationally and generated considerable interest especially from Australia where the factory outlet concept is well established and showing significant growth.”

“Dress-Smart was an unusual offering comprising both real estate and the continuing arrangements with the management company which runs the factory outlets. The market quickly recognised the consistent growth of the portfolio since its inception, with this growth expected to continue. There is also further development potential within the portfolio. There is a shortage of larger investments on offer with sound credentials in the Australasian market. In particular, demand for these types of investments has increased with the dramatic growth of funds since the inception of compulsory superannuation in Australia.”

John Goddard of Colliers International who negotiated the transaction with the Australian institution said, “this is further evidence that the Australian market had definitely placed New Zealand on its radar screen, particularly with regard to the retail sector. This is primarily due to the view that NZ currently offered a better value for money opportunity.”

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