73 Brownston Street, Wanaka - INFORMATION MEMORANDUM

Wanaka Commercial Market Wanaka commercial property traditionally has investment yields lower than commercial property located in other parts of New Zealand. This is due to commercial property being tightly held, with strong rental growth over a sustained period of time, and demand outweighing supply in terms of the availability of prime retail space. This low yield trend also exists outside of Wanaka’s CBD, albeit at slightly higher yields, but low in terms of national comparison. Wanaka is a vibrant holiday destination town with strong growth factors and accordingly an area attractive for long term investment.

In Wanaka’s CBD there have been relatively few sales in recent years. There appears to be good demand for investment property at all quantum levels. The most recent sales being 43 Helwick Street which sold at auction in November 2020 for a market yield of approximately 2.95% reflecting investors expectation of strong future growth fundamentals for Wanaka’s CBD along with further development potential and the entry price point in the town centre for this property.

The White House Restaurant on the corner of Dunmore and Dungarvon Street sold off market late 2019.

Property markets within Wanaka remain active across all market sectors, under pinned by continuing population growth, the strong construction industry and the domestic tourism market. This positive growth has led to a strong performance of supporting industries.

Prime retail rentals for space within the CBD core has been strong with ongoing rental growth at review and renewal until recent events related to COVID-19 although the rental market now appears to be stabilising at rental levels similar to that prior to the COVID-19 pandemic. There is currently limited vacancy. We are aware of instances in the past where tenants wishing to enter the market have paid key money to sitting tenants to secure well located sites.

Larger tenants entering the market will find a lack of larger floor plates available and with no further building currently taking place in the CBD, this trend looks set to continue.

Secondary retail rentals for space on the fringe of the CBD have been achieving rental increases on review and renewal albeit at a lower level in comparison to the prime CBD. Rental levels for good quality offices have also been increasing until recent events related to COVID-19 although appears to stabilising at levels similar to that prior to the pandemic. There is limited availability of premium office space within the Wanaka CBD at present.