This article is from the Australian Property Journal archive
REAL estate funds manager Centuria Capital Group has acquired the Coles and Aldi-anchored Halls Head Central sub-regional shopping centre from ISPT in a $70 million counter-cyclical play.
The purchase takes the ASX-listed group’s assets under management to $3.2 billion. The acquisition will underpin the single-asset, closed-ended wholesale fund Centuria Halls Head Central Fund.
As well as the supermarkets, the 19,373 sqm centre has a Kmart discount department store, two mini-majors, 50 speciality shops and two freestanding pad sites, and attract 2.4 million customer visits per year. Nearly two-thirds of gross income is generated from non-discretionary tenants the asset provides a 3.3-year weighted average lease expiry and 100% occupancy.
Located along Old Coast Road, the assets sits on nine hectares and has a low site coverage of 22%, providing potential development or land banking opportunities across around 10,000 sqm of surplus land.
The asset was secured at circa 40% below its independently assessed replacement cost.
CBRE’s Simon Rooney and James Douglas were the appointed sales agents by fund manager ISPT, which put Halls Head Central to the market last year as one of five landmark assets across the country worth as much as $600 million as it looks to move towards the industrial, health and life sciences sectors.
“Hall Head Central provides a compelling, counter-cyclical investment opportunity within WA’s second largest city, Mandurah,” said Jason Huljich, Centuria’s joint CEO.
“The centre benefits from a high proportion of non-discretionary retailers while presenting value-add opportunities through tenant remixing or potential redevelopment.”
He said Western Australia “remains a standout state for retail property”, citing greater Perth’s population increasing by 3.6% throughout the previous 12 months, coupled with low forecast retail supply and vacancy,
Halls Head Central is now Centuria’s third retail asset within the City of Mandurah, actively managing the Erskine Shopping Centre and Mandurah Greenfields Shopping Centre.
“With limited new supply of retail assets, due to construction supply pressures, coupled with a strong population growth, we believe tenant demand will continue to outstrip supply for well-maintained sub-regional shopping destinations across Western Australia,” said Bruce McCully, Centuria head of retail, said, “
The Centuria Halls Head Central Fund will provide an initial five-year term and is expected to be offered to wholesale investors from 20th May. It has forecast starting annual distribution of 8.0% paid monthly, and a target 13.5% IRR. The Fund has a targeted equity raise of $41 million with investments starting from $100,000.
ISPT’s portfolio offering included four retail properties – Melbourne’s historic GPO building, The Strand Melbourne, Halls Head Central and Eastgate Bondi Junction – and the vacant office building at 270 Pitt Street, the latter billed as a “unique re-positioning opportunity in Sydney’s CBD”.
Charter Hall acquired Eastgate Bondi Junction in February for nearly $127 million.
ISPT put the portfolio to market as it separately sold the Brisbane home of fast fashion giants H&M and Uniqlo for $145 million.
JLL’s preliminary March quarter data showed commercial property transactions totalled $4.05 billion in the period, down from $4.72 billion on the same period in 2023. The quarter is typically 45% lower in transaction levels compared to the remainder of the year, according to JLL.
Retail sales volumes came in at $535 million in the quarter after an unusually strong December quarter that saw $3 billion of assets traded. Much of the recent activity in the sector has been focused around neighbourhood shopping centres.
