This article is from the Australian Property Journal archive
INVESTMENT and funds management company Realside Property has spent $107 million on Maddington Central in Perth, as the group makes a move into retail.
The 27,661sqm Maddington Central is a sub-regional convenience-based asset anchored by Coles, Woolworths and Kmart, located 18km south-east of the CBD on Attfield Street.
The sale price is a 10% premium to Vicinity’s book value of $97 million as at June 30 2023. The asset’s book value as at December 2023 was not disclosed due to commercial reasons.
Simon Rooney and James Douglas from CBRE managed the off-market sale on behalf of the vendor, Vicinity Centres, who has also listed another inner-city Perth neighbourhood shopping centre, Victoria Park Central Shopping Centre.
Victoria Park Central is located just 3km from the Perth CBD along Albany Highway, one of the city’s premier retail strips.
“The West Australian retail market continues to be a focus for investors given the state’s solid economic fundamentals, which have translated into robust retail asset performance,” said Rooney.
The centre has an annual turnover of $208.7 million, with $138.1 million from the centre’s three anchor tenants.
“There is significant mixed-use development potential for the site subject to the relevant approvals given the underutilised 13.16ha landholding including an adjoining separately titled vacant land component of 1.56ha favourably zoned ‘regional centre’, providing optionality to the incoming purchaser,” added Rooney.
Maddington Central has a main trade area population of 219,336, around twice the benchmark national trade area population for a sub-regional shopping centre.
With the main trade area total retail expenditure level is estimated at $4.4 billion and is forecast to increase at an average rate of 3.2% to $7.9 billion by 2041. With supermarkets representing 25.6% of the total retail spending market.
“Realside is excited to finalise the acquisition of Maddington Central, a shopping centre that we have particularly coveted given the significant mixed-used opportunity that the property provides,” said Linda Rudd, CEO at Realside.
“This is our first retail acquisition and has created a key opportunity to diversify and expand on our existing office and industrial portfolio. It provides Realside the ability to bring together the collective experience of our team to deliver an improved retail offering.”
Maddington Central is also set to benefit from the pipeline of infrastructure and urban renewal projects in the trade area, including the $11 billion for the WA Government’s Metronet rail infrastructure.
“Realside will work with Sirona Urban, who are appointed as asset and development manager, to assist in delivering our vision for the property to unlock a revitalised retail and community precinct,” added Rudd.
In May, Vicinity Centres also offloaded another fuel station adjoining one of its Melbourne western suburbs shopping centres for $11 million.
Vicinity Centres recently entered an agreement with the Future Fund to acquire its 50% interest in Lakeside Joondalup, Western Australia. And the Victorian government fast-tracked the approval of the $780 million expansion of Salta Properties’ and Vicinity Centres’ Victoria Gardens Shopping Centre.
Meanwhile the Maddington deal continues to build momentum in the retail investment sector, following IP Generation’s acquisition of Stockland Glendale for $315 million recently week – in the largest retail transaction of the year and Scentre buying out Dexus in Westfield Tea Tree Plaza.
IP Generation has also made major recent purchases, spending $300 million on Craigieburn Central, VIC and $180 million for a 50% interest in Rockingham Centre, WA.
In April Centuria Capital bought the Halls Head Central sub-regional centre from ISPT for $70 million, which was 40% below replacement cost. Charter Hall acquired Eastgate Bondi Junction in February for nearly $127 million. ISPT also sold the Brisbane home of fast fashion giants H&M and Uniqlo for $145 million.
