WA syndicator buys Ballarat health and LFR hub
HMC Capital has sold a prominent essential services focused large format retail centre in Ballarat’s Wendouree, off-market.
On behalf of the HealthCo Health and Wellness REIT, the manager is banking $33.3 million for 101 Learmonth Road.
It acquired the property from an interest in 2020, attributing $18.8m.
The buyer this time around is Perth based Lester Group.
The syndicator recently launched a campaign calling for investors to back the entity that will hold it five years – the Wendouree Trust.
Stonebridge’s Justin Dowers and Kevin Tong were the agents.
Lester backs Wendouree
On 3.9 hectares, the Wendouree asset contains 11,596 square metres of which 99.6 per cent is occupied (45pc to the government’s Services Australia – formerly the Department of Human Services – and 31pc to health services).
Ten tenancies are fitted out for specialty businesses and occupied by, amongst other high-profile brands, Chemist Warehouse, Derrimut Gym and Aurrum Kids childcare.
The weighted average lease expiry by income is 4.92 years.
There are also 404 car parks.
Lester plans to invest $1m.
“We’re thrilled to be acquiring this unique LFR asset underpinned by a list of first class, non-discretionary service focused tenants including Services Australia [and] St John of God Healthcare,” Lester Group executive director, Russell Lester, said.
“This property offers a robust and secure income stream, complemented by potential development and rental reversion opportunities during the holding period,” he added.
The price is “substantially below replacement value” according to the executive.
There is the potential to reap tax benefits too, he added.
The asset also has development upside, Mr Lester said.
Wendouree Trust is forecasting a four per cent average cash return paid quarterly and a four pc internal rate of return.
Victoria counter-cyclical: agent
Mr Dowers said Victoria presents counter-cyclical opportunities – the state still underpinned by strong population growth and “excellent retail fundamentals”.
“Lester Group has strategically recognised this with their acquisition of the Wendouree Health and LFR Centre,” he added.
“The transaction highlights the sustained demand for high-quality retail assets in regional hubs like Ballarat, where population growth and infrastructure development continue to drive economic activity,” according to the executive.
The Lester site is next door to a block (121 Learmonth Rd), construction of which began this week, for another LFR asset with 2700 sqm and 362 car parks, presently seeking occupiers.
Ballarat is about 115 kilometres west of Melbourne.
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