Chinese buyer pays $145m for Century City Walk
Chinese-backed private group Chaolong Developments is looking to expand its Melbourne property empire with the acquisition of the Century City Walk Shopping Centre and the adjoining 200-room Novotel Melbourne Glen Waverley hotel for more than $145 million.
The group, run by three Melbourne-based directors hailing from China, knows the city well and is also associated with buying on the city’s leafy St Kilda Road boulevard, where it owns an office building.
Chaolong Developments has just slapped a caveat on the shopping centre and hotel complex, which Sydney-based advisory firm iProsperity Group put on the block in April.
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The latest transaction puts on display the hunger of Asian capital for institutional scale retail and mixed-use assets at a time when some local buyers are shying away from the area.
The run of purchases by Asian buyers kicked off late last year with the sale of Burwood One for $181.5 million to a private Hong Kong-based investor on the sharpest yield — 5.11% — paid for a subregional centre.
Malaysian group Mulpha is also in due diligence to buy the Brimbank Shopping Centre, in Melbourne’s northwest, from US private equity group Blackstone for about $160 million.
The deal also marks a break in the drought of major hotel transactions with relatively few deals closing this year despite long-running plays by groups including iProsperity.
Sitting on a 10,308sqm site on Springvale Road, the 8403sqm Century Walk shopping centre will be sold with a net passing income of $2.89 million per annum from tenants including an eight-screen Village Cinema complex, Strike Bowling, and Pancake Parlour, while the Accor-run, 200-room Novotel, spins off $5.1 million.
CBRE director Mark Wizel is managing the sale of the retail component with Lewis Tong and Josh Rutman, with Savills hotels duo Michael Simpson and Vasso Zographou on the hospitality asset.
While the agents would not comment on deal specifics, Mr Wizel did confirm that there was a strong body of active capital still chasing both traditional retail investment assets as well as those that may have a short to medium-term mixed-use twist.
The assets were highly sought-after by a range of buyers, including wealthy individuals, and also drew offshore interest, driven partially by the large local Asian community.
The Novotel is also benefiting from continued growth in tourism, the low Australian dollar, low interest rates as well as the lack of competition and available stock, and its proximity to major business parks. The iProsperity Group bought the Novotel Melbourne Glen Waverley for the symbolic price of $73,666,666.66 in 2016, with six considered a lucky number in Chinese culture.
It picked up the adjoining shopping centre for about $45 million a year later.
The two properties form part of the Glen Waverley Activity Centre anchored by the station.
This article originally appeared on www.theaustralian.com.au/property.
