HomeCo has purchased TownCentre Victoria Point, south east of Brisbane, for $160 million.
The deal reflects a fully let 4.75 per cent yield.
The asset, developed nearly 20 years ago, will be held in the Daily Needs REIT (HDN), which floated last November.
TownCentre Victoria Point
With 20,892 square metres of lettable area in nine buildings, TownCentre Victoria Point spreads 7.6 hectares with 866 car parks.
Bunnings and Woolworths are the anchors; McDonald’s and Healius Medical Centre also occupy.
The vacancy rate is two pc.
The Weighted Average Lease Expiry is 7.1 years.
According to the marketing agents, JLL’s Nick Willis, Jacob Swan and Sam Hatcher, the centre’s primary trade area includes 50,000 people, rising at 1.6pc per annum, which is above the national average – 1.3pc (story continues below).
HomeCo said the acquisition aligns with its target model to hold 60pc in neighbourhood shopping centres, and about a fifth for each of Large Format Retail and Health and Services product.
The buyer will now undertake an institutional placement for $70m, at an issue price of $1.45, to help fund the purchase.
“Opportunities to acquire an asset of this quality and scale are rare, particularly one which complements our strategy and existing portfolio so strongly,” HDN fund portfolio manager Paul Doherty said.
“This well-located flagship convenience property is anchored by high quality, strongly performing tenants on long-term leases with attractive organic growth,” he added.
“In addition, the property offers significant long-term potential to drive enhanced returns through development by capitalising on the property’s significant expansion potential”.
HDN will receive a 12 month rental guarantee – worth $230,000 – for the vacant tenancies.
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