This article is from the Australian Property Journal archive
AUSTRALIA’S retail market has continued its busy run, with Parkstone Funds Management, in partnership with fund manager Centennial, acquiring Bundaberg’s biggest shopping centre for $107 million.
The transaction of Hinkler Shopping Centre comes hot on the heels of a string of major mall deals, including Fawkner Property splashing out $390 million for Cairns Central, which saw the retail sector in 2023 record the highest sales volumes in Australia’s commercial real estate landscape – the first time that had happened since 2004 – according to JLL.
The 21,000 sqm Hinkler Shopping Centre, located in Maryborough Street, is anchored by Woolworths, Kmart and Coles and includes a further 65 retail and dining spaces. It has an occupancy of 99%, of which about 94% of gross lettable area (GLA) is national retailers.
The centre’s GLA and moving annual turnover (MAT) metrics position it among the top 10 centres nationally in its class.
“The Hinkler Central Shopping Centre purchase aligns with our strategic vision to acquire off-market, high-performing, dominant land-rich regional centres at favourable yields and well below replacement cost,” Centennial executive director Paul Ford said.
He said the property offers a “very attractive distribution yield while comprising quite defensive characteristics”.
Parkstone Funds Management managing director, Tim Wilkin, said, “We consider it an excellent yield and growth play because of the high barriers to entry in this market, being acquired approximately 30% below replacement cost”.
He added there also exists further opportunity to enhance the Centre in terms of development, “which when combined with the ability to access positive rental reversion, should be well supported by the substantial government infrastructure spending currently in progress and planned for Bundaberg”.
“The resilience and attractiveness of sub-regional shopping centres adds a further level of optimism to our regional investment strategy. Centres of this quality serve as important community hubs and have demonstrated proven resilience through some challenging times in recent years.”
Centennial CEO, Adrian Taylor said, “This is the first of what we anticipate will be a broader partnership that will position us as a major player at scale in this space”.
The transaction was handled by Sam Hatcher and Jacob Swan of JLL.
Hinkler Central features more than 1,000 mostly undercover parking bays with direct travelator access, and its specialty tenant mix is orientated to “consumed on-site” products and services such as banking, medical, food and beauty, which increases dwell times.
Bundaberg is the sunshine state’s second-fastest growing city with 7.1% economic growth.
Retail comes in at #1
Recent JLL data showed that there was $6.12 billion worth of retail asset transactions across 2023, with about 60% of that taking in place in the December quarter alone. Those deals included Charter Hall Retail REIT offloading $225.5 million worth of shopping centres in Adelaide’s Morphett Vale and Rosebud, on the edge of Melbourne, in line with book valuations, and property fund manager Haben taking full control of the Stockland Townsville shopping centre, acquiring the remaining half-stake and management rights for $123.5 million.
In comparison, Australian office transactions in 2023 totalled $5.14 billion – a year-on-year fall of about 30% – and the industrial sector clocked $5.81 billion.
