This article is from the Australian Property Journal archive
Recent back-to-back large format retail transactions have spurred Perth fund manager APIL to put its large homemaker and lifestyle centre on the market, hoping to capture the renewed vigour in the sector.
APIL, founded by former Burgess Rawson executive Peter Hughes, has appointed agents Colliers and JLL to market the Joondalup Gate centre in Perth’s north.
It was acquired by the close ended APIL Joondalup Gate Retail Trust in 2016 for $55.80 million.
Located in Edgewater, it is 24km north of Perth CBD and 4km south of Joondalup CBD. The centre has a substantial Gross Lettable Area (GLA) of 24,682 sqm and is anchored by BCF, Dan Murphy’s, AMX Superstores, Revo Fitness, Freedom Furniture, and Early Settler, set on a 64,115 sqm site. There is also potential to develop 6,210 sqm of surplus land parcel located at the southern end of the site
The agents said Joondalup Gate offers investors a rare opportunity to step into the tightly held asset class with an established centre in Western Australia, where LFR opportunities are few and far between.
WA has only seen two LFR deals since the beginning of 2023.
This is the third LFR asset in WA to hit the market in three years, after Arise Developments’ sale of Joondalup Square in December to US giant Barings for $74 million in Australia’s largest LFR transaction of 2024, and the October 2023 the HomeCo Midland was snapped up by Banjo Bond’s Cosgrove Group, formerly PWD, for $75 million.
JLL WA capital markets senior director Sean Flynn said Joondalup Gate presents a rare opportunity to acquire a flagship large format retail asset in one of Perth’s most dynamic growth corridors.
“With its strategic position and strong tenant covenant, the centre is primed to capitalise on the projected 1.2% average annual population growth in the trade area through to 2046.”
The centre boasts a 98% occupancy with an average tenant tenure of 7.8 years, and an estimated fully leased net income of close to $5.6 million per annum.
JLL WA capital markets senior director Nigel Freshwater said the centre’s comparatively low average gross occupancy cost of circa $292 per sqm compares very favourably with nearby Joondalup Square which shows around $420 per sqm by the same measure.
“This key characteristic cements Joondalup Gate as the undisputed large format retail affordability option within the catchment, delivering strong prospects for future rental growth without compromising on profile,” he added.
Colliers WA state chief executive Richard Cash said the WA retail sector continues to outperform the national average, with retail turnover growth of 3.3% year-on-year as of November 2024.
“This strong performance, combined with forecasts of 1.6% Gross State Product growth in 2025 and an average of 2.1% annually over the following five years, creates a favourable environment for retail property investments in the state,” said Cash.
Furthermore, the WA LFR sector has bucked the national trend with the average cap rate tightening circa 12.5 basis points in recent quarters.
“The combination of Joondalup Gate’s strong existing performance and its potential for long term future redevelopment makes it an unprecedented opportunity for investors looking to secure a flagship large format retail asset in Perth’s northern growth corridor,” added Flynn.
APIL’s proposed sale follows two major LFR transactions within the past two months. As previously reported by Australian Property Journal in December, US giant Barings acquired Joondalup Square for $74 million and last month Centuria Capital acquired the Logan Super Centre, south of Brisbane, for $115 million in the biggest LFR transaction in three years.
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