The Westgate stage two development will be located opposite the $155 million Westgate Mall and surrounding the town square, and adjacent to the Auckland Council’s multipurpose library and community facility planned for completion in 2016.
It will increase the net lettable area of DNZ’s combined Westgate investment to 34,000sqm.
The development will include a purpose built main street retail environment.
Currently at the preliminary planning phase, the development is expected to cost approximately $30 million, with a minimum yield of more than seven per cent.
Completion is anticipated before October 2016.
The project will be funded through the sale of noncore assets.
“Westgate stage two will be a complementary offer to our Westgate Mall development. It will provide greater critical mass, increased visitation and a broader range of categories for our customers, delivering higher total retail sales at Westgate,” Peter Alexander, DNZ CEO, said.
“Additionally, the Westgate stage two project enables DNZ to curate the retail offer around the town square, and provide further dining options, which are an important part of a comprehensive retail offer.”
Alexander said that the Westgate Mall project is more than 80 per cent leased by budget income, reflecting the strong confidence that retailers have in the location and offer.
He said that the momentum and market knowledge that DNZ has gained through the leasing of the Westgate Mall will assist the completion of Westgate stage two.
Under the original 2013 agreement to acquire the Westgate Mall land from Westgate Town Centre, DNZ has the right to undertake Westgate stage two.
The Westgate Town Centre has indicated it disputes that DNZ is entitled to exercise its right to undertake the Westgate Stage Two development under the agreement.
DNZ believes the terms of the agreement are clear, without matter capable of dispute, but may need to take steps to enforce its rights in respect to Westgate stage two.