SCA pays Woolworths $33m for Darwin shopping centre

The 2.1 hectare Bakewell shopping centre contains 297 car parks.

SCA Property Group has made its first Northern Territory investment, paying $33 million for the Bakewell Shopping Centre in Palmerston, a satellite region 20 kilometres east of Darwin.

The 2.1 hectare complex is the last to sell from a portfolio of four retail assets Woolworths’ development arm Fabcot listed in February.

Bakewell Shopping Centre was completed four years ago.

All up the vendor reaped $127.03m.

The Bakewell property traded for the highest yield – seven per cent implied fully let, according to SCA chief executive officer Anthony Mellowes, when he announced the purchase in August.

JLL’s Jacob Swan and Nick Willis were the marketing agents.

Bakewell Shopping Centre

SCA’s newest asset, 1 Mannikan Court, at the north east corner of Chung Wah Terrace and Lambrick Avenue, was completed four years ago so still offers depreciation benefits.

With 6407 sqm of area, it includes a BWS, 10 specialty stores and 287-bay car park.

A 4800 sqm Woolworths supermarket trades 49pc over benchmark, the agents promoted.

Settlement was scheduled last month.

Woolworths’ other centres achieved yields between 5.4-5.8pc

Woolworths’ portfolio – four modern, supermarket-anchored shopping centres – traded following expressions of interest campaigns which closed from early April.

By the middle of that month, the first property, in Wadalba on the New South Wales Central Coast, was purchased for $26.15m reflecting a 5.7pc net passing yield, following a Colliers International deal.

A Keysborough asset in Melbourne’s south east was also acquired – the $33.13m price, following a CBRE campaign, reflecting the most impressive return – 5.4pc (story continues below).

In June, Primewest spent $34.75m on the other complex – Spring Farm Shopping Centre, in Sydney’s outer west, is also on 2.1ha.

That value reflected a 5.8pc yield. Colliers International was again the agent.

SCA focused on tenant mix, retention, satisfaction

Reporting its FY20 results in August, SCA said it renewed 236 leases (up from 215 in FY19) and agreed to 146 new ones (compared to 87 the previous corresponding year).

Seventy five extensions and 55 fresh agreements were struck during the (March-June) COVID-19 period, Mr Mellowes added.

The group in February purchased another major retail investment – the Warner Marketplace in Brisbane, for $78.4m.

SCA recently banked $21.5m selling a Cowes complex on Victoria’s Phillip Island (which coincidentally was developed by Fabcot about 10 years ago).

Last financial year, the landlord also offloaded properties within its SURF1 retail fund ahead of winding it up.

“The COVID-19 pandemic has impacted many of our specialty tenants who have experienced sales declines,” Mr Mellowes said.

Rental assistance has been provided to more than 600 of them, he added.

“Our focus continues to be to improve the tenancy mix in our centres with a bias toward non-discretionary categories, to maintain high retention rates on renewal, and to maintain low specialty vacancy by working pro-actively with our tenants in these challenging times.

“This will ensure that we have sustainable tenants paying sustainable rents, supporting our strategy of generating defensive, resilient cash flows to support secure and growing long term distributions to our unitholders”.

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Marc Pallisco

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

Marc Pallisco