This article is from the Australian Property Journal archive
QUEENSLAND Investment Corporation has bought the Gardentown Shopping Centre in Toowoomba, south east Queensland from Aspen Group for $30 million.
The sale price reflects a market yield of 8.8%.
Aspen’s managing director Angelo Del Borrello said the sale was an excellent result in difficult market conditions. The sale delivered the company a passing income yield of 5.50% and an estimated reversionary yield of 7.40%.
Del Borrello said the asset was in the planning process for a significant redevelopment. However, given Gardentown’s current trading and income performance, its short lease expiry profile and the softening retail outlook, the property represented some income risk for Aspen in the medium term.
“The sale eliminates Aspen’s retail sector exposure and further removes potential development risk from the portfolio together with any requirement to fund development capital expenditure,” he added.
QIC’s head of global real estate Laurie Brindle said the acquisition represented the group’s long-term commitment to the Toowoomba region.
“Gardentown Shopping Centre is a strategic retail asset, centrally located within the Toowoomba CBD, and will respond well to QIC management,” he said. “The property complements our existing asset in the Toowoomba retail market and presents an excellent opportunity to introduce new retailers to the region,”
The centre was established in 1989 and has the capacity to accommodate over 60 retail outlets, with a gross lettable area of approximately 12,500 sqm.
The centre’s major tenants are a Supa IGA Supermarket and Best & Less. Other tenants include Jetset, Australia Post, Dymocks, Ed Harry Menswear, St George Bank and Brumby’s. The property also features 750 car parks.
Del Borrello said poceeds from the sale will be applied to debt reduction. Following the settlement of Gardentown, Aspen’s gearing will reduce 2% to 35%.
Australian Property Journal
