This article is from the Australian Property Journal archive
THE HomeCo Daily Needs REIT (HDN) has offloaded another large format retail (LFR) asset, this time a complex in Warners Bay in NSW, home to the Good Guys, Officeworks, Supercheap Auto and Pillow Talk, for $56.5 million in one of the sub-sector’s biggest deals in 2024.
The deal follows its recent $54 million divestment of HomeCo Ballarat in Victoria.
On the buy side of HomeCo Warners Bay is Banjo Bond’s Cosgrove Group, formerly PWD, which a year ago acquired HomeCo Midland in Perth from HDN for nearly $75 million.
HomeCo Warners Bay has 12,336 sqm of floor space and is entirely occupied by ASX-listed and/or national tenants, with a weighted average lease expiry of 4.6 years.
It occupies a high-exposure location 20 minutes from the Newcastle CBD and is located in a fast-growing population corridor. Cosgrove Group director Rob Thomas said the centre is well-positioned to capitalise on local population growth and resulting growing retail trade.
“In addition to the greenfield house and land growth in the area, the NSW government has recently announced plans for a further 20,000 medium-density homes around three train-stations all within 10-minute drive of the property,” he noted.
Bond said the asset is an “established and well trading centre on a large landholding fronting major road infrastructure”.
“It’s becoming increasingly difficult to find land large enough to develop LFR centres with any scale, which we believe will make this asset more valuable in the future.”
HomeCo Warners Bay is the second largest LFR centre to transact nationally in 2024, sitting below The Bayview Centre in Warrawong, which was acquired for $57 million by MLC Asset Management from The Griffith Group, on a 5.75% capitalisation rate.
The sale was brokered by Colliers’ James Wilson. Colliers also negotiated the HomeCo Ballarat and Bayview Centre deals, and has transacted over 70% of LFR centres nationally in 2024 so far.
“Buyer interest stems from centres occupying large strategically located sites within a sector forecasting positive rental reversion,” Wilson said.
LFR made up some of the $220 million portfolio of retail assets picked up by fund manager Trilogy Funds earlier this month from funds linked with Eildon Capital Group
Whitmore Property announced in September new large format retail fund that is targeting $150 million in assets tenanted by household brands including Supercheap Auto, The Good Guys and Subway.
For Cosgrove Group, the Warners Bay acquisition lands a few months after its $116.5 million purchaser of The Esplanade Hotel in Fremantle from Centuria.
