IP Generation lines up another landmark mall

The Modbury asset contains nearly 100,000 square metres.

Melbourne fund manager IP Generation is believed to buying a half stake in Modbury’s Tea Tree Plaza – the largest shopping centre north of Adelaide and the second biggest in South Australia.

The deal with Dexus, which last year took over the AMP Capital Shopping Centre Fund which held it – is worth $308 million, according to sources – a 12 per cent discount on the c$350m guide when listed in July.

Covering 22.4 hectares, the main component, 976 North East Road, contains 99,176 square metres of recently renovated space, 99 per cent of which is occupied.

Major tenants include Aldi, Big W, Coles, Harris Scarfe, Hoyts, Myer, Target and Woolworths.

Also with some 235 specialty stores and 4650 car parks, it attracts 10.8 million annual visits from a c640,000 person catchment, of which 75pc own their homes or are paying a mortgage.

An ancillary property – 7 Smart Rd – also forms part of the deal.

CBRE’s Simon Rooney is the agent; the transaction is speculated to reflect a c8.3pc fully let yield.

SCentre Group holds the mall balance.

It is also manager via Westfield (story continues below).

Tea Tree Plaza

IP Generation intends to hold Tea Tree Plaza in a single asset trust now calling for $162m in equity, promising a c10pc annual return.

Any deal would come a week since we reported the group, led by ex-Impact Investment Group executive Chris Lock, was buying the 2.6ha Brand Smart outlet in Melbourne’s east from Acure Asset Management.

A year ago, meanwhile, IP Generation secured Craigieburn’s 24.87ha Craigieburn Central, in Melbourne’s north, for c$300m – from Lendlease’s Australian Prime Property Fund Retail.

Last February, Mr Lock outlaid $180m for a half stake in Perth’s Rockingham Centre.

AMP Capital was that seller, recording a major drop on the $305m it spent in 2017.

Westfield Marion, in the southern suburbs, on 22.9ha and with 342 stores, is the state’s biggest shopping centre.

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Marc Pallisco

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