This article is from the Australian Property Journal archive
THE Vicinity Retail Partnership and a Vicinity Centres mandate client have put the Midland Gate in Perth to the market, within weeks of completing a $100 million redevelopment and expansion of the regional shopping centre.
Midland Gate is the dominant regional centre in the eastern suburbs, with a total gross lettable area of more than 68,600 sqm.
The redevelopment and expansion introduced Aldi, Harris Scarfe, JB Hi-Fi, and Rebel Sport to the centre, as well as a new fresh food precinct anchored by a brand new and expanded Coles supermarket, an upgraded food court and a refurbished new generation Kmart store.
JLL’s Simon Rooney is marketing the centre via expressions of interest closing 13th June on behalf of the Vicinity Retail Partnership and one of Vicinity Centres’ mandate clients.
The offering includes management rights.
Investors in the Vicinity Retail Partnership wholesale fund include the Future Fund and the Canada Pension Plan Investment Board. The fund, once operated by Novion, sold off a half-stake in the Rockingham Shopping Centre late in 2017 for around $305 million, while the $149 billion Future Fund put a half share in the Lakeside Joondalup shopping centre to the market with expectations of $650 million last year.
Regional shopping centres in Perth rarely changed hands, given their high rate of sales productivity relative to similar assets in other states, Rooney said.
Only three comparable transactions over $300 million have been made in the last decade in, he said, with the last individual regional centre to transact in the state being a one-third share in Karrinyup Shopping Centre in 2013, which UniSuper acquired from Westfield for $246.7 million.
“While retail investors are selective, high quality, core regional shopping centres with management rights are a highly unique offering and keenly sought, particularly those that sit in strategic population growth corridors, within the tightly held Perth market,” Rooney said.
“Investors are attracted to the regional asset class given its status as the most defensive retail sub-sector and offers the highest risk-adjusted returns.
“There are tangible signs of a recovery in the WA economy, supported by the rebound in state economic growth and stabilising commodity prices and mining investment. Investors are making a strategic decision to enter this market counter cyclically, to capitalise on this recovery and strong relative value that the state offers.
The Lendlease-managed Australian Prime Property Fund Retail is offering its 50% stake in Westfield Marion, South Australia’s only super-regional and largest shopping centre, with expectations of around $740 million, while coming private equity giant Blackstone has been shopping around Rundle Place.
Last year, Scentre Group acquired a half share in Sydney’s Westfield Eastgardens for $720 million, which came shortly after QIC Global Real Estate finalised its $1 billion acquisition of 50% interests in the Werribee Plaza and Pacific Epping shopping centres.
Two AMP Capital funds took on a 50% stake in the Indooroopilly Shopping Centre late in 2017 for $800 million at a sub-4.5% yield, and the Besen family selling its remaining 25% interest in Highpoint shopping centre in Melbourne’s west to GPT for $680 million, at a 4% yield.
Australian Property Journal
