Centuria picks up another Mandurah mall

Also this week, we are reporting Centuria bought a Victorian glasshouse.

Centuria has snapped up Halls Head Central – its third major shopping centre at Mandurah, 75 kilometres south of Perth.

ISPT and Vicinity spent c$45 million extending Halls Head Central a decade ago.

On nine hectares at 14 Guava Way, with 247 metres frontage to Old Coast Road – the main arterial between Bunbury and Rockingham – the fully occupied 19,373 square metre complex is trading for $70 million, just shy of its $72m mid-2023 valuation which assumed a 7.25 per cent capitalisation rate.

ISPT, on behalf of the Core Fund, and Vicinity held equal stakes.

The pair also upsized the asset from 6000 sqm at a cost of c$45m between 2014-2016.

Six years ago it was valued at $114m.

With three anchors – Aldi, Coles and Kmart – two mini-majors, 50 specialty stores and two pad sites, 64pc of income is collected from non-discretionary tenants.

The weighted average lease expiry is 3.3 years.

Also with 960 car parks, a playground and alfresco dining area, the asset, developed in 2001, nowadays attracts some 2.4 million annual visitors.

CBRE’s Simon Rooney and James Douglas were the agents.

Vicinity is also selling Perth’s Maddington Central to Realside for $107m which would demonstrate an 8.8pc return (story continues below).

Below replacement cost: Centuria

Centuria said it is buying Halls Head Central at 40pc below an independently assessed replacement cost.

It will be held by a single asset fund now seeking wholesale investors to the tune of $41m, forecasting an eight per cent starting distribution yield ad 13.5pc internal rate of return over an initial five years.

“Hall Head Central provides a compelling, counter-cyclical investment opportunity within Western Australia’s second largest city, Mandurah,” Jason Huljich, Centuria Joint chief executive officer, said.

“The centre benefits from a high proportion of non-discretionary retailers while presenting value-add opportunities through tenant remixing or potential redevelopment,” he added.

“Western Australia remains a standout state for retail property….Greater Perth’s population has increased by 3.6pc throughout the previous 12 months and when coupled with low forecast retail supply and vacancy, it provides compelling fundamentals for the retail sector,” according to the executive.

Centuria also holds in the area the Erskine Shopping Centre and Mandurah Greenfields Shopping Centre.

Following settlement in July of Halls Head Central – which is passed by some 40,500 vehicles a day – it will control assets worth $3.2 billion – a diversified mix also including agricultural, including a Victorian tomato growing facility, purchased this week.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.