Backdropped by an economic climate that supports the performance of dedicated value-for-money outlet centres, and with investors circling for compelling retail assets with scale, the only dedicated outlet shopping centre in New Zealand’s South Island has come to the market.
Dress Smart Hornby at 411 Main South Road, Hornby lies at a major intersection on State Highway 1 on Christchurch’s western edge, around 11km from the CBD and 7km south of Christchurch International Airport.
The 7,125m2 centre offers a curated retail mix of 45 national and international brands across apparel, footwear and lifestyle categories including Calvin Klein, Tommy Hilfiger, adidas, Puma, Icebreaker, Mons Royale, Hallensteins, Bendon and Bonds.
Occupying a circa-12,661m2 site with 327 car parks, the property has undergone a number of refurbishments over the years. Upgrade works currently underway include seismic strengthening works, stage one of a roof sheet replacement, and waterproofing of the car park membranes.
As at December 2024, the centre recorded robust annual sales of $56.3 million, equating to an average $7,899/m2. With a low vacancy rate of just 2.9%, sales are expected to grow steadily over the coming decade, supported by rising retail expenditure forecasts for the Canterbury region.
The property has an estimated net passing income of more than $5 million per annum, with uplift expected once fully leased. Almost 70% of the centre’s gross passing income is generated by brands whose ultimate parent companies are publicly traded on stock exchanges around the world. Management of the centre is currently outsourced, but the property will be sold free of any existing management agreements, providing potential value upside for an incoming owner.
Ryan Johnson, William Wallace, and Jesse Paenga of Bayleys Knight Frank are handling the sale of Dress Smart Hornby with a deadline private treaty process closing Thursday 14th August, unless sold prior.
Describing it as a standout retail asset in the broader New Zealand market, Bayleys Knight Frank national director commercial says Dress Smart Hornby is a proven asset and offers investors exposure to a well-performing niche sub-sector of the retail property market with inherent growth potential.
“Globally, the outlet sector is in growth mode, underscored by consumer demand for well-priced branded goods, and reflected in New Zealand with a further three dedicated outlet centres across the North Island,” says Johnson.
“As the retail property sector has re-rated faster than other segments of the commercial market, retail assets offer good value for investors. With the cost of debt now sitting at circa 5%, retail property with scale is looking very attractive to well-resourced investment partnerships and syndicators seeking robust returns and long-term capital growth.”
Retail property has attracted robust attention from institutional and family office capital in the Australian market, and Johnson anticipates strong interest out of Australia for Dress Smart Hornby.
“Cap rates are firming across the Tasman, and with our government keen to attract offshore investment, Australian-based buyers will be casting their net wider for successful retail assets that have scale, locational advantages, and growth fundamentals.”
With a comprehensive seismic upgrade in progress, Johnson says Dress Smart Hornby has resilience advantages over many other large retail shopping centres around the country, and as the only specialised outlet shopping centre in the South Island, it has a unique point of difference.
“Thanks to a diversified and well-curated tenant mix, the centre’s financial performance has held up through fluctuating market cycles when other parts of the retail landscape have faltered.”
“Christchurch’s economy has outperformed many other parts of the country, and investors are recognising the long-run fundamentals of commercial property within New Zealand’s most modern urban centre,” says William Wallace, Bayleys Knight Frank General Manager South Island commercial and industrial.
“The city’s affordability, lifestyle appeal and economic resilience are attracting families and professionals, and Dress Smart’s trade area population is expected to increase by more than 120,000 people by 2046.
“The region is seeing major urban expansion and infrastructure investment, so this proven retail asset is uniquely positioned to provide long-term value to investors looking for exposure to a stable and increasing retail sector.”
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