Portfolio of five neighbourhood shopping centres sold for $180 million
Five neighbourhood shopping centres have been sold for a combined $180 million, as convenience-based and non-discretionary assets remain highly sought-after by investors.
The SCA Property Group boosted its already significant portfolio of shopping centres by acquiring the five assets from Centuria Capital Group subsidiary Primewest.
The centres in Queensland, Adelaide and Perth are all anchored by leases to supermarkets including Coles, Woolworths, Aldi and IGA.
JLL’s joint head of retail investments [Australia] Sam Hatcher said there was strong investor interest in the shopping centres.
“The assets were strongly sought on a portfolio and individual basis with 21 offers received, reinforcing the pent-up demand from varying capital types to own neighbourhood centres,” Mr Hatcher said.
Neighbourhood shopping centres – like the Brassall Shopping Centre in Ipswich – remain highly sought-after by investors. Picture: Supplied by JLL
Neighbourhood shopping centres have been highly sought-after by investors during the pandemic, as local and convenience-based malls benefitted from people shopping locally.
JLL research showed neighbourhood centre investment activity was at record levels in 2021, with 58 transactions totalling $2.9 billion.
Mr Hatcher said neighbourhood centre investment activity remains strong in 2022, with 22 assets trading in the first half for a total of $900 million.
“The non-discretionary retail sector is proving to be the most resilient across all sectors and we expect capital to continue to increase their allocations to this highly defensive sector.
“With construction costs at elevated levels for the foreseeable future, existing and strongly performing neighbourhood centres will continue to attract a premium with constrained supply.”
The collective $180 million sale price was a 24.1% premium to the assets’ June 2021 book value and represented a weighted average fully let yield of 6.0%.
Centuria’s Primewest divested the centres on behalf of two unlisted wholesale funds.
Centuria joint CEO Jason Huljich said the divestments provided an exceptional result for both funds’ unitholders, delivering double digit internal rates of return.
“These daily needs retail neighbourhood shopping centres have proved resilient throughout the past few years as local communities continued to rely on the supermarket-anchored centres for their non-discretionary shopping,” Mr Huljich said in a statement to the ASX.
“Both funds have been held for long-term periods and the sales provide compelling returns for our investors.”
The Brassall Shopping Centre, which is anchored by Woolworths and Aldi supermarkets, in Ipswich sold for $46.5 million while the Coles-anchored Dernancourt Shopping Centre in Adelaide sold for $46 million.
The five neighbourhood centres, including the Fairview Green Shopping Centre in Adelaide, are all anchored by supermarkets. Picture: realcommercial.com.au/sold
The Fairview Green Shopping Centre, which is anchored by a Romeo’s Foodland supermarket, in Adelaide fetched $39.5 million.
The Port Village Shopping Centre in Port Douglas, which has a Coles and a K Hub smaller format Kmart store, sold for $36 million and the Supa IGA-anchored Tyne Square Shopping Centre in the inner-city Perth suburb of Northbridge sold for $12 million.
After the acquisition of the five centres, SCA Property Group will own and manage more than $4.6 billion of convenience-based shopping centres across 96 properties.
“SCA Property Group expects to add value to the acquisition portfolio through its active asset management and leasing capabilities,” the company said in an ASX announcement.
The international expressions of interest campaign was handled by JLL’s Mr Hatcher, Jacob Swan, Nick Willis and Ben Parkinson.
