Lendlease, IP Generation trade $300m Melbourne mall

Craigieburn Central contains 64,159 square metres.

Lendlease is selling the land rich Craigieburn Central, north of Melbourne, three years after it pulled the property from the market because of COVID.

The fund manager is banking $300 million – some $50m less than its mid-2020 value – from Chris Lock’s IP Generation, which has been bulking up its retail investment portfolio since late 2021.

A 1.3 hectare Craigieburn convenience retail asset traded for $20 million in 2021.

The deal comes two months since Lendlease offloaded two more shopping centres, Menai Marketplace, west of Sydney, and Southlands Boulevarde, south of Perth, to HMC Capital, the new name for HomeCo.

The group is also close to divesting Port Macquarie’s Settlement City for a speculated c$105m to ISPT.

These three properties were held by the Sub Regional Retail Fund, which wound down.

Craigieburn Central

On 24.87 hectares in a major growth corridor, Craigieburn Central contains 64,159 square metres anchored to Aldi, Big W, Coles, Kmart, United Cinemas and Woolworths.

There are also 139 specialty stores and 2693 car parks.

Lendlease said it attracts more than 6.44 million annual visits.

Each shopper spends just over $58, it added.

“Craigieburn Central’s total trade area has an estimated population of 207,871…which is forecast to grow at an average rate of three per cent reaching 322,760 by 2036,” according to the seller.

“The average age of the main trade area population is 33 years,” it said (story continues below).

“The main trade area average household income is $109,661 with 67.1 per cent of population with dependent children,” it added.

The deal comes 30 months since QIC paid New York based Prudential Financial $130m – reflecting a 5.4pc yield – for the near new Craigieburn Junction homemaker centre, which spreads 6.05ha.

Also in 2021, a convenience retail investment in the suburb, on 1.26ha, collected $20m – a 3.9pc return.

IP bulks up

The Craigieburn Central acquisition comes less than a month since IP Generation outlaid $180m for a half stake in Perth’s Rockingham Centre – $125m less than what that vendor, AMP Capital, paid the Future Fund and Canada Pension Plan Investment Board in 2017.

Last October, meanwhile, Mr Lock sold Woolworths a Coles backed retail asset on 1.15ha in Miranda, 25km south of Sydney – for $68m, more than twice what he paid Paul Lederer 16 months earlier.

Like Craigieburn Central, and indeed many assets IP picks up, that property held significant development upside.

The fund manager also swooped on a half stake of Gold Coast’s Westfield Helensvale last year for $185m.

That seller was QIC.

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Marc Pallisco

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