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Axiom Properties lands deal with Costco for South Australia’s first warehouse

Axiom Properties lands deal with Costco for South Australia’s first warehouse

Axiom Properties (ASX: AXI) has signed a Heads of Agreement with U.S. retail giant Costco to develop South Australia’s first Costco warehouse outlet as part of Axiom’s $65 million retail development in the Adelaide suburb of Kilburn.

Axiom and joint venture partner Southern Cross Equity Group have agreed to lease over 5 hectares of land to Costco under a 50-year ground lease arrangement.

Costco plans to construct a 14,000 square metre retail warehouse on the site, which adjoins the sub-regional shopping centre that Axiom and Southern Cross Equity Group are developing as part of their first stage retail development.

Coles will anchor the centre with a new 5,500 square metre supermarket, alongside a 5,650 square metre Kmart Discount Department Store.

Other major tenants that have been secured include Priceline Pharmacy, Liquorland, Coles Petrol, Flight Centre, McDonalds and various other specialty retailers.

The centre is expected to be completed in April next year, and will incorporate over 35,000 square metres of retail space.

Southern Cross Equity Group, an Adelaide-based boutique property syndicate, will provide an equity investment of $11.25 million to the development.

Axiom held around A$3.9 million in cash at the end of the December 2012 quarter.

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