Harvey Norman buys $97m homemaker centre

Harvey Norman now owns Watergardens Bunnings.

Harvey Norman has spent $97 million on a homemaker centre in Melbourne’s north west Taylors Lakes.

The deal for Watergardens Homeplace at 430 Melton Highway comes a month after the retail giant paid $28.25m for Geraldton Homemaker Centre.

It is the latest example of an occupier outbidding institutions, syndicates and private investors for shopping centre stock – coming two months since Beacon Lighting paid its landlord, Mair Property Funds, $7.8m for a Perth showroom.

In January, Costco outlaid a reported $30.5m for a property next door to its Auburn (Sydney) store, with expansion plans.

Eight months ago, Nick Scali spent $6.6m on a Keswick (Adelaide) factory, for a shop.

Retailers have sold property too – including IKEA, which offloaded the former Pipeworks Market, in Melbourne’s Campbellfield, a decade after buying it for an outlet.

Watergardens Homeplace

Watergardens Homeplace, at 430 Melton Highway, was listed by Colliers’ Lachlan MacGillivray in February.

QIC Property Fund and QIC Shopping Centre Fund were the vendors (story continues below).

Watergardens Homeplace spreads 7.1 hectares.

Harvey Norman is one of the occupiers; Barbecues Galore, Beacon Lighting, Bunnings and SuperCheap Auto are now its tenant clients.

The Weighted Average Lease Expiry of the c25,000 sqm complex is 4.4 years.

Based on the net operating income upon listing ($4.83m per annum), the deal reflects a 4.98 per cent yield.

On 7.08 hectares at the north west corner of King St, the asset contains 827 car parks.

QIC Global Real Estate managing director Michael O’Brien said the property generated significant interest.

Last month, the same vendors sold Primewest the Robina Home+Life retail investment, on the Gold Coast, for $66m.

Not long earlier they offloaded the neighbouring Bunnings Robina.

The Taylors Lakes property includes a couple of fast food outlets.

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Marc Pallisco

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