This article is from the Australian Property Journal archive
AFTER spending half a year on the market, Vicinity Centres and its co-owner owner have sold off the Brandon Park shopping centre in Melbourne’s south-eastern suburb of Wheelers Hill to a Newmark Capital Limited-managed fund for $135 million.
Major retail landlord Vicinity will receive $67.5 million in proceeds from its half share interest, continuing its offloading of non-core assets.
In January, it sold off the Toormina Gardens shopping centre in Coffs Harbour, alongside Challenger, to Fort Street for $83.3 million.
Grant Kelley, Vicinity’s chief executive officer and managing director, said the group was pleased to continue to progress the divestment of its non-core assets and had now agreed to the sale of around $109 million of assets this financial year, for a combined 3.1% premium to their book values. Brandon Park traded at a 3.8% premium.
The 1970s-built centre is on a 58,000 sqm Springvale Road site and has a floor area of circa 23,000, and returns $9.6 million net fully leased.
Last week, the Vicinity Retail Partnership – which counts the Future Fund and Canada Pension Plan Investment Board among its investors – sold off its 50% share of the Grand Plaza shopping centre in Brisbane’s southern suburbs to Invesco for $215 million. Vicinity Centres has held onto its remaining half share, management rights and development rights.
Last year, Newmark Capital, led by former Hawthorn footballer Chris Langford and Simon T. Morris, revealed plans for a $1.25 billion, seven-building mixed-use redevelopment of the iconic Jam Factory in South Yarra, and a syndicate overseen by the group sold its A-grade 417 St Kilda Road building for $145 million.
The Brandon Park transaction was negotiated by JLL’s Simon Rooney, who said Victorian retail assets are tightly held, especially in metropolitan locations, with Brandon Park one of only four sub-regional centre transactions within the Melbourne metro area since 2015.
It is the first sale of its type since Casey Central at the end of 2016 for around $221.0 million.
“Unlisted funds continue to be drawn to the sub-regional sector given the attractive yields available relative to premium core assets,” Rooney said.
“Victoria is experiencing the strongest rate of population growth on record, and investors are attracted to the positive growth drivers underpinning the Melbourne retail market.”
A recent JLL report found retail property transactions topped $8.8 billion in 2017 – the second highest level on record.
It found 2017 was a year of major transactions, the highest volume of transactions above $300 million on record totalling $3.3 billion, with the five largest deals accounting for approximately 40% of total volumes, as owners take advantage of market liquidity.
The biggest deal was the Vicinity Centres/GIC asset swap for $1.1 billion; followed by a 50% share in Indooroopilly Shopping Centre in Brisbane for approximately $800 million – the biggest retail single asset sale on record; a 25% share in Highpoint shopping centre in Melbourne for $680 million; Home Hub Castle Hill and Home Hub Marsden Park for $436 million – the biggest Large Format Retail sale on record; and a 50% share in Rockingham shopping centre in WA for approximately $305 million.
Australian Property Journal
