Parkstone and Centennial team up for $107m Hinkler Central swoop
Centennial and Parkstone Funds Management have teamed up to buy Hinkler Central in Bundaberg for $107m.
Two boutique real estate funds houses – Centennial and Parkstone Funds Management – have teamed up to buy Hinkler Central in Bundaberg for $107m.
The centre was put on the block earlier this year by QIC Real Estate.
It last traded in 2015 when QIC picked it up from Mirvac for $110m.
JLL’s Sam Hatcher, Jacob Swan and Nick Willis are brokering the latest deal but declined to comment, as did the parties.
The sale is part of the reset of the shopping centre markets, with assets trading below both peak values and replacement cost. The dramatic recalibration of the retail sector is seeing landlords again lifting rents even with some tenants under pressure from rising interest rates.
The Bundaberg buyers see the income streams from the centre as defensive and resilient at a time when some areas, including offices, are facing more challenges due to rising vacancy levels and incentives.
They are setting up a new trust to hold Hinkler, with the fund forecasting an average distribution of 8.3 per cent per annum and targeting overall returns of 13 to 15 per cent per annum over five years.
The dominant subregional shopping centre is anchored by a strongly performing Coles, Woolworths and Kmart, which are all paying turnover rent. The 20,800sq m centre also has about 56 specialty tenants.
The price shows a passing yield of about 8 per cent, and the centre also has potential for repositioning and value-add plays.
The new trust has billed non-discretionary retail as a resilient asset class, even during periods of high inflation.
The manager noted that retail had underperformed for several years and rents had largely reset, but capitalisation rates remained elevated, creating an opportunity to move in. “We believe there are attractive buying opportunities in regional shopping centres that offer greater upside than CBD and fortress malls,” the new trust said.
