$117m: Leopold’s Gateway Plaza joins Geelong retail raid

Retail investors have spent nearly $200 million buying up major shopping centres in the Geelong region in the past five months as the region rides a residential development boom.

The latest to sell is Leopold’s Gateway Plaza after contracts were signed to trade the 33,510sqm centre for $117 million from a fund managed by shopping centre giant Vicinity Centres.

Leading real estate investment trust Charter Hall Retail leads the purchase with joint venture partner Charter Hall Prime Retail Fund, backed by industry super fund MTAA Super and Charter Hall Group.

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Charter Hall Retail chief executive offer Greg Chubb said a forecast population expansion through residential development and a higher per capita income made Gateway Plaza an attractive prospect for the trust as a higher growth convenience plus asset.

The sale is expected to settle by September and represents a 0.3% premium above book value.

The shopping centre, with anchor tenants Coles and Liquorland Kmart, Aldi and Bunnings plus 54 specialty shops, is located 10km east of Geelong’s central business district at the gateway to the Bellarine Peninsula.

Gateway Plaza has 54 specialty stores.

“The investment into a high-quality convenience plus centre like Gateway Plaza aligns with the Trust’s investment strategy and follows our other acquisitions in fast growing metropolitan locations,” Chubb says.

“The Centre benefits from strong anchor covenants with fixed annual growth from both Bunnings and Aldi,” he says.

The centre’s main trade area population of 76,250 residents is projected to grow to more than 88,880 residents by 2026, with nearly 6000 new dwellings planned or under construction.

Charter Hall said the average per capita income was 3.25% above the Victorian non-metro average.

Additionally, the nearly one million visitors to the region spending an additional $648 million in the area equated to an additional 8767 permanent residents in the catchment.

Coles and Liquorland, Kmart, Aldi and Bunnings are the anchor tenants at the shopping centre.

“Strategic asset locations, convenience based, dominance within the trade area and a diverse mix of strongly performing anchor tenants are recurring theme across our resilient non-discretionary retail portfolio,” Chubb says.

The centre underwent an $85 million redevelopment in 2017 and comprises a freestanding shopping centre, including a freestanding Bunnings, and car parking for 1117 vehicles.

The acquisition will be funded through recent divestments.

Colliers International’s Lachlan McGillivray handled the expressions of interest campaign launched in March.

The trade area for Gateway Plaza at Leopold is forecast to grow from 76,000 to 88,000 in 2026.

Vicinity Centres, which portfolio includes Corio Central and Belmont Village, the network of DFO shopping centres and Melbourne’s giant Chadstone complex, also manages the wholesale fund that acquired the Bellarine Peninsula complex in 2014 for $26 million.

The sale takes the value of assets traded in the region to $188.5 million after Newcomb’s Bellarine Village shopping centre sold for $36.5 million to a private investor from Melbourne, while Toorak-based investor David Feldman acquired Torquay Village from Coles for $35 million in February.

And more shopping centres could be heading to market after Vicinity Centres told the ASX on Monday it was preparing to sell up to $1 billion of subregional and neighbourhood shopping centres to fund more development of its major capital city centres.

Vicinity Centres chief executive Grant Kelley says the centres are located across a national portfolio, and are subregional, neighbourhood centres.

This article from the Geelong Advertiser first appeared as “Leopold’s Gateway Plaza shopping centre sold to Charter Hall trust”.