This article is from the Australian Property Journal archive
PROPERTY syndicator Primewest has bought a neighbourhood shopping centre in north Ipswich for $29.8 million on a yield of 7.25%.
Located at 64-68 Hunter St, the Brassall shopping centre comprises 10,393 sqm of space and includes 578 car parks on a 4.1ha site.
It is anchored by two supermarkets, Woolworths and Supa IGA, with national tenants representing 74% of gross rental income and 60% of the total gross leasable area. Major lease expiries are well separated with Woolworth’s initial expiry due in 2028 and IGA’s 20 year lease due to expire in 2017. IGA’s lease provides further option terms of ten plus five years potentially extending the lease to 2032.
Other retailers include Subway, Bendigo Bank, Australia Post, Pharmacy, News, Queensland Credit Union, Ipswich City Council, Liquorland, QML, Crossroads, Cameraland – Kodak Express, 6 ATMs, Millers plus freestanding KFC and a childcare centre, returning a net income of $2.168 million.
The transaction was handled by Colliers International’s Stewart Gilchrist and Stephen Kidd.
Gilchrist said the campaign attracted over 120 enquiries from private investors and superannuation funds and groups.
“In total there were 11 offers received, with Primewest being the successful purchaser.
“Initially the shopping centre appealed to investors as a sound passive investment due to its strong tenant mix and $2.17 million net annual income. However after consultation with architects and developers, the centre also presented a redevelopment opportunity with the ability to remix the tenancies, improve and expand the centre.
“This appealed to Primewest who were looking at reviewing and expanding the tenancy mix and take advantage of the centre’s excellent location and strong demographics,” he added.
Primewest director John Bond said the acquisition is part of the company’s $100 million retail property trust that focused on acquiring convenience-based shopping centres in several states.
“The centre was a good fit for the trust as it represented an ideal opportunity to enhance the asset and improve the tenancy mix to provide a better return for investors.
“We believe retail is currently under-rated and this is supported by the fact that Primewest currently has minimal vacancies across its Australia-wide retail portfolio,” Bond said.
Bond said that the trust was now fully invested and attention would now turn to enhancing the assets.
Australian Property Journal