Vicinity has sold a half stake in another mall – this time Broadmeadows Central, in Melbourne’s north.
The interest in the 11.53 hectare complex abutting the suburb’s train station is trading to Nikos Property Group, established by petrol station mogul, billionaire, Nick Andrianakos and nowadays led by his son, Theo.
The $134.5 million price reflects a modest drop on the ($138.35m) December, 2022, valuation, which assumed a 6.75 per cent capitalisation rate.
It is the second co-investment for the pair; last year Nikos acquired a 50pc share in Adelaide’s Colonnades shopping centre from Vicinity which holds the balance.
That deal was worth $138.2m.
In early 2020, meanwhile, Nikos outlaid $85.2m for a campus style office in Brisbane’s inner west Milton while two years earlier, it paid Lendlease $101.35m for Santos House, in Adelaide’s CBD.
Nick Andrianakos, who turns 80 in November, established Milemaker Petroleum, which sold to Caltex for $95m in 2017 (the businessman retained the freeholds on 30 year leases).
His company’s commercial property portfolio – which was establishing well before the Caltex sale – also includes Melbourne offices at 549 and 580 St Kilda Road.
Last June, we reported Nikos sold a prominent Campbellfield industrial development site to Cabot for $41m – a significant rise on the $1.45m the family paid ANZ in 1993.
Developed in 1974 as Meadow Fair, the Broadmeadows centre underwent major renovations in 1995 and 2003.
Vicinity, under its Colonial incarnation, acquired it in 2004 and undertook another refurbishment two years later – creating the entertainment precinct.
With 60,681 square metres, there are 164 tenants; Aldi, Coles, Kmart, Hoyts and Woolworths are the anchors.
The moving annual turnover is $328.1m.
The Weighted Average Lease Expiry is 4.6 years.
There are also 2964 car parks.
Following the sale to Nikos – settlement of which is scheduled at the end of the month – Vicinity will continue to control Broadmeadows Central’s management and leasing as well as oversee future potential development activity (story continues below).
“We are delighted to further strengthen our strategic partnership with Nikos by adding Broadmeadows to our existing joint interest in the Colonnades Shopping Centre in South Australia,” Vicinity chief executive officer and managing director, Peter Huddle, said.
“We are confident that our collective expertise in retail property investment will drive sustained returns for both parties,” he added.
“In the immediate term, the sale will further strengthen our balance sheet with the proceeds expected to be used to repay bank debt, resulting in a circa 70pc basis point reduction in gearing,” according to the executive.
“This transaction is not expected to have a material impact on earnings.
“At Vicinity, we have an active investment program where we are recycling and allocating capital to fund accretive retail and mixed use developments and acquiring premium, destination assets aligned with our strategy.
“Divesting interests in selected assets where we can realise attractive pricing enables us to execute our long term growth priorities and deliver securityholder value whilst maintaining our flexible balance sheet and strong credit metrics”.
Another half-stake mall sale
CBRE’s Simon Rooney brokered the off-market sale.
“The Broadmeadows Central acquisition continues the trend of private investment groups, syndicates and, to a lesser extent, institutional investors, taking out passive stakes in retail assets alongside institutional managers,” he said.
“This allows institutional partners to reduce gearing and maximise the use of capital while maintaining management fee income,” he added.
The deal comes nine months since Telstra Super sold JY Group a half stake in Sydney’s Carlingford Court for $120.5m, reflecting a 6.3pc yield.
In 2021, meanwhile, Challenger’s CIP Asset Management divested a 50pc interest in that city’s Roselands shopping centre for $167m – a 6.25pc return – again to JY.
Coincidentally, Vicinity is the co-owner of both properties.
Other malls in which a half stake has traded recently include Sunshine Marketplace, in Melbourne’s west, which sold to Aware Super and Altis for $65m in February, and the Rockingham Centre in Perth, that was picked up by IP Generation for $180m.
In Queensland, meanwhile, the Dexus managed AMP Shopping Centre Fund offloaded 50pc of Stockland Townsville to Haben for c$125m, while Invesco divested a 50pc interest in Brisbane’s Grand Plaza to EG for $215m.
Subscribe to our newsletter at the bottom of this page.