This article is from the Australian Property Journal archive
ASX-listed retail landlord SCA Property Group (SCP) has shown confidence in the ongoing high performance of neighbourhood shopping centres, buying a portfolio of five malls in South Australia, Queensland and Western Australia for $180 million – a 24.1% premium to book value.
The acquisition, from fund manager Centuria subsidiary Primewest, was struck on a yield of 6%.
The assets include Adelaide’s Dernancourt and Fairview Green shopping centres, Brassall Shopping Centre near Ipswich, Port Village Shopping Centre in Port Douglas and Tyne Square Shopping Centre in Perth.
Anchored by Coles, Romeo’s Foodland, Woolworths and Aldi, Coles and K-Hub, and Supa IGA, they have an average occupancy rate of 98% and weighted average lease expiry of 4.9 years.
The South Australian assets sold at premiums to book value of 34.4% and 30.7% respectively.
Post the acquisitions, SCP will own and manage more than $4.6 billion of convenience-based shopping centres across the country and expects to add value to the portfolio through asset management and leasing.
The acquisitions will be debt-funded utilising existing undrawn bank facilities.
On the sell-side, the divestments will generate a $5.7 million performance fee. The assets were held across two unlisted funds, a single-asset fund that owned the Fairview Green asset and the Primewest Retail Trust.
“These daily needs retail neighbourhood shopping centres have proved resilient throughout the past few years as local communities continued to rely on the supermarket anchored centres for their non-discretionary shopping,” Jason Huljich, Centuria joint CEO said.
“Both funds have been held for long-term periods and the sales provide compelling returns for our investors.”
JLL’s Sam Hatcher, Jacob Swan, Nick Willis and Ben Parkinson handled the sale of the portfolio, which reflects the largest neighbourhood portfolio transaction since the Fort Street re-capitalisation and sale of the Lederer portfolio, also brokered by JLL.
Hatcher said the assets were strongly sought on a portfolio and individual basis with 21 offers received, reinforcing the pent-up demand from varying capital types to own neighbourhood centres.
“Neighbourhood centre investment activity in 2022 continues to be strong, with 22 assets trading within the first half of the year, totaling AUD 900 million. The non-discretionary retail sector is proving to be the most resilient across all sectors and we expect capital to continue to increase their allocations to this highly defensive sector.
“With construction costs at elevated levels for the foreseeable future, existing and strongly performing neighbourhood centres will continue to attract a premium with constrained supply,” said Hatcher.
| Divested Properties | State | Value |
| Fairview Green Shopping Centre, Fairview Park | SA | $39.5m |
| Dernancourt Shopping Centre, Dernancourt | SA | $46.0m |
| Brassall Shopping Centre, Ipswich | QLD | $46.5m |
| Port Village Shopping Centre, Port Douglas | QLD | $36.0m |
| Tyne Square Shopping Centre, Northbridge | WA | $12.0m |
| Total | $180m |
SCA Property Group recently acquired the Delacombe town centre in Victoria’s Ballarat for $112 million, as well as the Drayton Central Shopping Centre in Toowoomba for $34.34 million, bringing in a record-breaking 5.39% yield in the neighbourhood asset class in regional Queensland.
In December, it established a $750 million metro convenience retail joint venture with Singapore’s sovereign wealth fund GIC.
Other recent neighbourhood shopping centre sales have seen a Victoria-based investor snap up an Emu Park asset on the Capricorn Coast for nearly $18 million, on a yield of 5.47%, and Brisbane-based fund manager Exceed Capital pick up the Boambee Central neighbourhood centre near the NSW coastal town of Coffs Harbour for $12.8 million
