This article is from the Australian Property Journal archive
WARREN Ebert’s Sentinel Property Group has acquired the City West Plaza homemaker centre at Sunshine in Melbourne’s west for $29.5 million from the Shepparton-based Copolus family.
City West Plaza is a 24,885 sqm centre anchored by Harvey Norman and other national tenants include KFC and Beds n Dreams, along with car parking for 803 vehicles, occupying a 6.075ha site on the corner of Ballarat Rd and McIntyre Rd at Sunshine North. City West Plaza is Sentinel’s second property in Victoria, joining the 138 Bourke St retail property in the Melbourne CBD.
This is the third asset for the Sentinel Homemaker (Open Ended) Trust, following the Geraldton Homemaker Centre in Western Australia and the Nowra House & Home centre in New South Wales.
“We have been actively looking to expand our presence in Victoria for some time but our focus has been on ensuring we secure the right property in which we can add significant value, in line with our proven buying strategy,” Ebert said.
“We believe there is a lot of potential to capitalise on the solid underlying fundamentals of City West Plaza.
“We have identified substantial value-add opportunities, including improving signage, visibility and access, as well as revamping the layout and presentation via the redevelopment, releasing and reconfiguration of retail tenancies. The centre currently covers only 41% of the total site area, which also provides the potential for future development of additional retail floor space,” he added.
City West Plaza has more than half of its current gross rental income secured by major national retailers, including anchor tenant Harvey Norman which has a 10-year lease expiring in October 2022 with three further five-year options. Harvey Norman occupies approximately 30% of the centre and accounts for approximately 41% of the centre’s total gross income.
Ebert said the company will target new opportunities throughout the Victorian market to further grow its property holdings in the state and the retail sector remains a major focus of Sentinel’s growth strategy.
“We continue to strengthen our leading position among Australian fund managers in the retail property sector and we are determined to stay ahead of the pack by acquiring properties that are not always seen as fashionable by others. However, we don’t just buy properties because they are out of fashion but for their underlying fundamentals and future growth potential and this is certainly the case with City West Plaza given its size and prominent positioning within the Melbourne metropolitan Ring Rd,” he added.
The transaction was negotiated by CBRE’s Justin Dowers and Mark Wizel on behalf of the Copolus family.
Dowers said investors continue to seek large format retail assets given their improvement with the more cyclical elements of consumer spending, relatively higher yields and long-term growth prospects.
“We are seeing an influx of buyers into the sector as confidence is growing in tenant performance, which is setting a view that there will be continued rental growth over the short to medium term,” he added.
Dowers said similarly strong interest was fielded in the 9,257 sqm Kessels Court Homemaker Centre, in Queensland, the sale price represented a sharp passing yield of 7.6%. Another recent Victorian sale includes Beaconsfield Hub which sold for a passing yield of below 7% in December last year.
“Whilst yields are compressing in this sector, we are still seeing buyers who were purchasing in 2011-2012, such as Sentinel, eager to continue buying further large format retail centres and expand their portfolio’s.” Wizel said.
Australian Property Journal
