Ganellen invests again in Brisbane retail
Ganellen Asset Management has picked up its second north Brisbane shopping centre in as many years.
The Sydney based group has forked out $20 million – reflecting a 7.25 per cent market yield – for the 33 year old Marketplace Deagon, after a deal to another party fell through.
The vendor, Melbourne’s James Zhang, via a company, Bao Li Hai, outlaid $23.3m – a 6.95pc return – in early 2018.
Before then, the asset was owned by Baradel Investments, co-controlled by developers John Papas and Philip Rhodes with Brisbane Roar backers, brothers Serge and Claude Baradel.
Deagon is 15 kilometres from the CBD.
Ganellen reweighs
On 1.4 hectares at 55-75 Bruan Street, an extension of Sandgate Road, one of Brisbane’s main arterials, and near the Gateway Motorway, Marketplace Deagon is passed by some 36,000 vehicles a day.
With 6005 square metres over two floors, it is anchored to Fresh & Save Food Warehouse, which rents 2374 sqm until 2031.
Essential services groups lease four of the five mini-majors: Guppy’s Early Learning, Rackley Swimming, Club Lime, a gym, and a medical centre.
BWS, Subway and The Reject Shop are amongst the highest profile tenants.
There are also 225 car parks.
The deal comes 18 months since Ganellen purchased the Kallangur Fair shopping centre, which is Woolworths anchored, for $22.45m, reflecting a 5.9pc passing return.
Like Marketplace Deagon, the vendor owned that mall since 2018, when it cost $21.38m from Charter Hall (story continues below).
Kallangur is about 13 km north west of Deagon.
Also in 2021, Ganellen offloaded the Ropes Crossing Village shopping centre, in Sydney’s outer north west, for $42m to Singapore’s Metro Holdings Limited.
That result was struck at a 5.5pc yield.
Diversified tenant clients
Ray White Commercial’s Michael Feltoe and Lachlan O’Keefe, who represented Mr Zhang, said Marketplace Deagon’s catchment is close to 60,000.
Most of the occupiers – 87pc – have rented for over a decade; it was anchored to Franklins between 1992-2000, then Cornetts Supa IGA for nine years, until 2016, they added.
Following this campaign, a deal to another suitor fell through due to finance complications, according to the executives.
“The property was subsequently sold to Ganellen, continuing the trend of interstate groups looking north to acquire value-add shopping centres,” Mr Feltoe said.
“Despite a changing economic environment, demand for resilient neighbourhood centres has remained strong,” he added.
“The expressions of interest campaign closed after the second of eight cash rate rises, but with 203 enquiries, this transaction reflects the pent-up demand or centres that offer repositioning upside through an active management style and capital expenditure to both enhance the tenancy mix and increase the net income,” according to the executive.
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