This article is from the Australian Property Journal archive
CENTURIA has snapped up the Margaret River Shopping Centre in WA for $15 million, reflecting an initial passing yield of 6.47%.
Located in the heart of Margaret River, the Coles-anchored single level retail centre at 132 Bussell Highway was acquired from a local vendor and will underpin the Margaret River Shopping Centre Trust (MRSCT or Trust).
The single-asset, closed-ended wholesale property fund, MRSCT, will provide a forecast initial starting distribution yield of 5.75% pa.
“This acquisition exemplifies how we are executing our corporate strategy to secure value-add opportunities to match specific profiles within our broad unlisted investor network. We are adopting a disciplined approach to our real estate transactions and are excited to offer this opportunity to our HNW investor base,” said Jason Huljich, joint CEO at Centuria.
James Douglas and Chloe Mason from CBRE, alongside Craig Butler and David Walser from VPG Property managed the sale on behalf of the vendor.
Originally constructed in 2001 by Coles Property Developments, the shopping centre is currently 100% occupied with a 2.8-year WALE, bolstering Centuria’s existing daily needs retail platform of $1.7 billion.
“The Margaret River Shopping Centre adds to Centuria’s strong convenience, neighbourhood shopping retail platform. The daily needs retail sector throughout Australia continues to experience strong tailwinds, underpinned by non-discretionary spending, which makes it somewhat resilient to wider economic impacts,” said Bruce McCully, head of retail at Centuria.
The shopping centre includes three specialty shops across 280sqm, including a Brumby’s bakery, Bob’s Shoe Store and jeweller, Glitterati, complemented by the combined 2,713sqm leased by Coles and Liqourland.
The strong performing Coles provides 81% of the centre’s gross income, with the supermarket’s supermarket’s Moving Annual Turnover (MAT) 10.2% above the Urbis 2021 ‘Single Supermarket’ benchmark.
“In particular, this shopping centre supports a burgeoning local community with the Australian Bureau of Statistics (ABS) showing the Margaret River region as having one of Australia’s fastest growing regional populations,” added McCully.
“The region benefited from a robust 3.5% pa population growth between 2011 and 2021, significantly above Western Australia and Australia’s growth of 1.6%pa and 1.4%pa, respectively. These favourable metrics provide us with the confidence to execute a favourable value-add leasing strategy.”
MRSCT will provide an initial 10-year term and monthly distributions. It has a minimum entry investment of $250,000. Centuria will seek to raise $9.15million to launch the Trust. The Trust will launch in early February.
The acquisition follows Centuria’s recent purchase of a distribution centre in Mackay leased to Wesfarmers subsidiary Blackwoods for $35.5 million, also bought to seed a new single-asset, closed-ended unlisted real estate fund.
Settlement for the the Margaret River Shopping Centre is expected for late March 2023.