This article is from the Australian Property Journal archive
MLC Asset Management has secured a brand-new large-format retail centre on the NSW South Coast in a $57 million off-market deal, in the sub-sector’s biggest sale of 2024 to date.
Colliers’ James Wilson and Ben Wilkinson secured the sale of Bayview Centre in Warrawong on a capitalisation rate of 5.75%, on behalf of the Griffith Group, who delivered one of only a few large-format retail centres constructed nationally in the current cycle.
The Griffith Group acquired the site for $35.25 million in 2020 from Blackstone.
It’s the third large-format retail centre MLC Asset Management has acquired following the $50 million-plus purchase of Chirnside Lifestyle Centre in Melbourne and Great Western Centre in Sydney.
Bayview Centre, which opened in December, occupies a strategic corner site in the Illawarra region, and boasts a 100% occupancy rate to national retailers including Beacon Lighting, Super Cheap Auto, Pillowtalk, JB Hi-Fi, Trek, Autobarn, RTM and Amart Furniture. It has a weighted average lease expiry of 7.92 years.
Bayview Centre has a site area of 24,300 sqm and a gross lettable area of 10,735 sqm.
“The addition of the Bayview Centre to our Property Plus portfolio is a good example of our well-planned rotation out of commercial office and into the large-format retail sector,” Simon Gross, head of property at MLC Asset Management, said.
“We have every expectation that our investors will benefit from the relatively high and secure rental distributions as well as the long-term nature of the national retail tenant leases at the centre.”
Wilson said the strong result reflects the high quality of the Griffith Group development, combined with the limited brand new investment opportunities given the current construction hurdles.
He said institutional and private investor appetite for large-format retail centres continues to grow given the sector offers investors strong income growth from high profile national retailers strategically located in growing catchments.
The sale comes the same week that fund manager and property developer Accord snapped up the HomeCo Parafield large-format retail centre in northern Adelaide for $28.5 million, also in an off-market deal by Colliers.
Anchored by Officeworks, the centre is 100% leased to national tenants across 15,571 sqm with a 3.7-year weighted average lease expiry. It sits on a 37,122 sqm site adjoining Parafield Airport.
