ISPT has acquired another mid-size Sunshine Coast shopping centre, this time for $30.5 million.
The fully leased Caloundra Village, 20 kilometres south of Maroochydore, was snapped up from a Marquette Properties syndicate which paid $18m in September, 2017 – the last commercial property peak.
That deal reflected a 7.05 per cent initial net yield.
The latest demonstrates a 4.74pc return.
JLL’s Jacob Swan and Ned McKendry represented Marquette.
Development upside, booming area
Built in 2000 and containing 3001 square metres, Caloundra Village at 1 Ormuz Avenue is anchored to Seasons IGA which recently extended its lease by 15 years on an agreement with four pc annual rent rises.
There are 12 non-discretionary specialty stores and 112 car parks too.
The 7764 sqm block, with crossovers to Bingera and Wyreema terraces, is zoned Major Centre, allowing for developments, including residential, up to five floors.
Melbourne based ISPT will hold the property, also known by 33 Ormuz Ave, in its Retail Australia Property Trust (IRAPT).
The deal comes five months since the manager, for the fund, paid $32.5m, reflecting a 4.5pc yield, for the Woolworths-anchored Coolum Park, 18km north of Maroochydore.
That price was also considered bullish, the seller – Will Chains Investments – outlaying $19.75m on a six pc return in 2016.
Elsewhere on the Sunshine Coast, IRAPT owns Coolum Village, where Coles is the key tenant (story continues below).
Another interstate investor deal
ISPT hasn’t been the only interstate investor chasing regional Queensland sub-$50m shopping centres.
SCA Property Group was behind the purchase of four of them last year, including Woodford Village, 70km south west of the Sunshine Coast, which cost $15.9m as part of a $108.1m spending spree in December.
The ASX-listed NSW based group also acquired Drayton Central near Toowoomba for $34.34m on a 5.39pc yield, Mt Isa Village ($44.2m, a 7.34pc return) and Cooloola Cove, a c120km drive north of Maroochdyore ($18.1m, a 5.35pc yield).
MPG Funds Management, from Melbourne, recently snapped up a mid-size Woolworths-backed Queensland mall last year too – Sarina Village, 40km south of Mackay, for $13m.
Sentinel expanded its presence in its home state as well, last August paying Elanor $28m – an 8.6pc return – for the Moranbah Fair Shopping Centre – 190km west of Mackay.
Marquette sells after adding value
Marquette refurbished Caloundra Village, which derives 93pc of its income from non-discretionary retailers.
It also increased the already high Weighted Average Lease Expiry from 8.5 years to 9.5.
“Caloundra Village is a solid addition to IRAPT’s portfolio of convenience-based neighbourhood centres,” fund manager Kate Mathewson said, adding it aligns with management’s buying strategy for 2021-2025.
“This acquisition increases IRAPT’s exposure to the Sunshine Coast, an area experiencing sea-change population boom and significant government investment infrastructure,” according to the executive.
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