Melbourne fund manager secures another regional mall
Melbourne fund manager Fawkner Property is continuing to boost its regional retail portfolio, this time with another asset from Stockland.
The deal for Stockland Nowra, 160 kilometres south west of Sydney, is counter cyclical: the $103 million price an eight per cent drop against the June 30, 2023 valuation ($111m).
That appraisal assumed a 6.25 per cent capitalisation rate.
The weighted average lease expiry at the time was 3.9 years with a Kmart lease for 7190 square metres – or 45pc of the lettable area – due for renewal last November.
Stockland held it 21 years.
CBRE’s Simon Rooney brokered the off-market sale. A parcel of land behind it is speculated could be trading to businessman Bob Ell for a residential project.
Nowra is the second retail asset Stockland divested this week.
The other, in Sydney’s north Balgowlah, traded to Revelop for $155m – $2m less than the June 30, 2023, valuation.
Fawkner invests again
The central mall in the region, Stockland Nowra contains 16,036 sqm of lettable area and 818 car parks.
Woolworths is the second anchor – for 4205 sqm on a lease due for renewal 10 years from now.
There are also over 40 specialty stores.
Fawkner has been an active purchaser of dominant regional shopping centres since COVID – many for below valuation or replacement cost.
Last February it acquired the Gladstone Shopping Centre, also known as Stockland Gladstone, between Bundaberg and Rockhampton, for $139m – a 7.4pc yield, and drop on the ($143.6m) appraisal the June 30 prior.
Stockland was again the seller (story continues below).
Six months ago meanwhile, in partnership with Hong Kong’s PAG, or Pacific Alliance Group, it paid c$465m for Perth’s Midland Gate, on 14.4 hectares.
In a noteworthy deal showing the collapse of demand for institutional grade retail in the years following the pandemic-led lockdowns, that seller, Vicinity, listed it two years earlier seeking c$650m – also its 2019 value.
A speculated $530m deal to Elanor in 2022 fell through.
That transaction also included management rights.
Last October, meanwhile, Fawkner paid Lendlease $107m for Port Macquarie’s Settlement City.
In that case the fund manager is speculated to have outbid another Melbourne group – ISPT.
Fawkner and Stockland also previously traded Stockland Cairns, on 11.3ha at Earlville, for $146m in late 2021.
That price, book value, reflected a 6.75pc yield.
Mr Rooney was again the agent following an off-market deal.
It also bought a Traralgon mall from Stockland that year for $85m.
As well, in 2021, Fawkner snapped up Mackay’s Mount Pleasant Centre from Vicinity for $162.5m – a 6.46pc passing return.
That investment occupies 8.76ha.
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