Centuria managed Primewest will create a single asset unlisted fund following the purchase of Geraldton’s Northgate Shopping Centre from Lendlease.
The off-market deal for the 3.68 hectare investment – the only sub regional shopping centre within a 385 kilometre catchment – is worth $71.23 million.
The vendor paid $46.5m in early 2012 for its Real Estate Partners 3 wholesale trust.
In recent years it has been held by the Lendlease Sub Regional Retail Fund.
In 2014, Northgate formed part of five property portfolio the landlord tried to offload for c$500m.
JLL’s Sam Hatcher, Nick Willis and Nigel Freshwater managed the latest campaign.
“There is an emerging cohort of investors who are looking to reweight to this sub-sector of the retail market given its relative value and resilience in recent times,” Mr Willis said.
“Access to convenience based sub-regionals has been constrained which has coincided with an improving appetite from capital to re-enter the sector,” Mr Hatcher added.
Also today we are reporting Sentinel is paying GPT Group c$420m for Darwin’s Casuarina Square.
Northgate Shopping Centre
With 15,774 square metres of lettable space and 522 car parks, Northgate Shopping Centre at 110 Chapman Road services a trade area of 51,000 people.
Coles and Kmart are the anchors; the latter has just renewed its lease for a decade.
This pair contribute to 49 per cent of the income.
There are also 28 specialty stores and four kiosks (story continues below).
Two pad sites are tenanted to Hungry Jack’s and a car wash.
The investment’s Weighted Average Lease Expiry is 4.7 years.
To fund the acquisition, Primewest will on Wednesday launch a capital raising targeting $41.8m of equity.
Its proposed trust will run until 2026; the distribution is forecast to be 7.25pc for the first two years.
“This is a rare opportunity to secure a retail asset that’s strategically located within one of Western Australia’s most populated areas,” the buyer’s head of Retail, Bruce McCully, said.
“It benefits from strong tenant covenants with 80pc of the property’s gross income derived from ASX-listed, national and multinational tenants,” according to the executive.
“Adding to this is the centre providing the only Coles and Kmart outlets in the area”.
Lendlease added the disposal both forms part of a repositioning strategy and represents a strong outcome for its investors.
“Sub regional shopping centres focused on essential convenience and service offerings have generally performed well over recent years and this has influenced positive investor sentiment towards the sub-sector,” the seller said.
“More broadly, the outlook for retail remains positive and confidence is returning…evidenced by strong transactions in the first half of this year”.
Geraldton is about 400 kilometres north of Perth.
In January we reported a smaller mall at nearby Glenfield traded for $10.4m.
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