This article is from the Australian Property Journal archive
AFTER completing its $200 million capital recycling program last year, Region Group has snapped up the Kallo Town Centre in Kalkallo for $64.5 million, in Melbourne’s first major neighbourhood centre transaction of the year.
Region has acquired the centre from property developer Oreana. The sale represents a yield of 5.98% for Oreana which is expanding its portfolio following the recent acquisition of land sites in Morayfield, Queensland and North Ellenbrook in Western Australia.
Oreana managing director Tony Sass said the sale reflects the group’s focus on delivering high-quality projects that attract strong market interest.
“We’re excited to continue expanding our portfolio with upcoming developments including future neighbourhood shopping centres in Mickleham, Clyde and Wollert.
“Neighbourhood shopping centres have shown remarkable resilience and growth in demand post-COVID, and Kallo Town Centre’s strategic location in Melbourne’s growth corridor makes it an excellent investment.
“The sale of Kallo Town Centre underscores the strength of Oreana’s development capabilities and the enduring appeal of high-quality, well-located retail assets,” he added.
Located in Melbourne’s north, approximately 30kms from the CBD and occupies a prominent site of 21,524 sqm in the heart of the Kalkallo masterplanned community, the centre was completed in late 2023 and spans over 7,000 sqm. It is anchored by a 12-year lease to Woolworths as well as 19 specialty retailers, medical, pharmacy, a gym, childcare centre and fuel station.
The Kallo Town Centre transaction is Region’s first acquisition after the company completed its $200 million capital recycling initiative, when it sold the East Warrnambool Shopping Centre in in Victoria’s coastal town of Warrnambool for $18.5 million.
Since May 2023, Region has divested $176.7 million of properties, at an average passing yield of 5.3%, including the Soda Factory in Brisbane’s West End, for $42 million and Riverside Plaza in Tasmania for $14 million.
Meanwhile Region is expanding its fund management platform through the establishment of the $393.9 million Metro Fund 2 with Singaporean sovereign wealth fund GIC.
Stonebridge Property Group’s Justin Dowers and Kevin Tong exclusively managed the off-market sale and said the deal al marks Victoria’s largest neighbourhood shopping centre sale in over four years and highlights the sector’s renewed appeal.
