Pacific Retail Group starts to build property interests

By Christine Nikiel

Friday 27th September 2002

Pacific Retail Group has signalled intentions to build up its property portfolio.

Pacific Retail's deal to buy the NZ Post building on Auckland's North Shore last month was a "tentative step" toward building up its portfolio, PRG chief executive Peter Halkett said.

"We're looking to develop more in our own right instead of just signing leases," Mr Halkett said.

The NZ Post building, in Wairau Park, is opposite an existing Noel Leeming store. PRG's winning tender is understood to be $6.8-$6.9 million.

Mr Halkett played down any major moves in the market for now. PRG would still lease most of its 127 stores in Australia and New Zealand, now and in the future, he said.

"This is just a tentative step. I doubt you'll find any radical property events coming out of PRG."

But he warned there were "a couple of things in the pot we can't disclose." PRG is expected to open two new Big Byte stores before the end of this year.

Its latest investment statement and prospectus says PRG plans to increase the Big Byte chain, a computer and technology specialist, to between 10 and 12 stores nationwide.

Mr Halkett said one advantage PRG had when deciding to expand and develop was that it was a retailer. "We have that extra string in our bow. We are retailers not speculators and are underpinned by our own stores."

Mr Halkett said PRG's primary objective was to secure the best site for its retail stores.

"If the best thing is to lease them, then so be it."

Other chain retailers such as The Warehouse have made a success of the sale and lease-back model, with 70 of its properties leased back to its own commercial operations.

PRG's current retail outlets include 46 Noel Leeming stores, 38 Bond & Bond stores, 24 Bendon outlets, 16 Living & Giving stores and two Big Byte stores.

And the flagship Noel Leeming stores are branching out. The first Noel Leeming furniture store has just opened in Manukau, with one in Botany Town Centre to open on October 3.

Comments from our readers

No comments yet