This article is from the Australian Property Journal archive
PERTH-based fund manager Westbridge Funds Management has sold its Midland Central Shopping Centre in Western Australia for $19.3 million to a private investor, after a competitive campaign.
Located in Midland WA, around 15km north east from the Perth CBD, the convenience based centre is fully leased to three national tenants including Dan Murphy’s, IGA and Optimal Pharmacy, with a 5.4-year WALE, returning a $1,237,525 per annum current net income.
Wayne Lawrence, partner and head of commercial agency at Cygnet West represented Westbridge in the sale, fielding over 80 expressions of interest throughout the campaign.
“The quality of the tenants and central city location produced a strong sale result in what is a challenging investment market,” said Lawrence.
Westbridge Funds Management initially purchased the centre for $12.3 million in 2012 as the sole asset of their Midland Central Property Trust.
“The strategy behind this Fund was to provide ongoing income to investors as well as potential for capital growth, underpinned by the Centre’s high-traffic neighbourhood and blue-chip anchor tenants,” said Damian Collins, chair at Westbridge.
“We are extremely pleased with the results from the sale, which mark a 56.5% increase on the asset’s initial purchase price. Together with stronger-than-forecast income distributions across the life of the Fund, this has enabled us to deliver a total return to our investors of 204% net of their initial investment.”
The Midland Central Property Trust delivered average income distributions of 11.7% per annum to investors, up from its initial mandate which targeted annual distributions of 8.3%.
“As well as proactive improvements across the various tenancies, including substantial works to the Pharmacy’s façade, we were also able to negotiate the resetting of the lease on the IGA tenancy for a further 10 years to strengthen the Fund’s cashflow and cement a more attractive divestment position,” said Alex Lambert, head of commercial funds at Westbridge.
The asset also boasts parking for 137 cars, sits 150 metres from the Midland Train Station and has flow through vehicle access from both Great Eastern Highway and Victoria Street, with almost 30,000 passing cars per day.
“This sharp result highlights the unassailable demand for daily needs retail properties, particularly in the strong WA economy, and we expect interest to remain high for this type of asset,” said Tim Scott, director of retail at Cygnet West.
