Retail pair make Orange buy on the road $1bn venture

Centennial Property Group executive director and industrial/logistics CEO Paul Ford. ·

Fund manager Centennial and retail joint venture partner Parkstone have kicked off the year by snapping up their second shopping centre asset in the NSW regional centre of Orange in a $37.4m deal.

The pair bought The Village on Summer Street from hospitality identity Bill Gravanis and renowned architect Paul Saunders.

Mr Gravanis’s Oscars Hotel Group, which he runs with brother Mario Gravanis, bought Luna Park in Sydney last year for more than $50m.

Buying The Village, a prominent centre in Orange’s city centre on a 21,090sq m site, is part of Centennial and Parkstone’s plans to build up a $1bn retail portfolio.

The deal was brokered by Steve Lerche of Savills and Nick Willis, Sam Hatcher and Sebastian Fahey of JLL

The retail component spans 4974sq m of gross lettable area, giving the new owners significant scope to maximise returns and build on the centre’s tenancy mix.

The move was partly funded by a $20m capital raising, which closed early and oversubscribed last December.

The closed-end Village on Summer fund is targeting an internal rate of return of 15 to 17 per cent per annum, supported by a retail mix geared towards non-discretionary retail spending, and its strong value-add potential and convenient carparking.

The Village is anchored by Supa IGA, one of the country’s top-performing Dan Murphy’s, 10 specialty retailers and has 268 car parks. The partnership is proposing to develop 1800sq m of retail space to meet demand from national retailers.

The centre was built in 1993 and underwent a $4m refurbishment in late 2022.

Centennial executive director Paul Ford said Parkstone was a specialist retail investment manager with proven expertise working across many retail assets nationally.

Parkstone’s retail portfolio now comprises about $300m in assets under management across seven subregional and neighbourhood centres in NSW, South Australia and Queensland.

“We are fortunate to have a joint venture partner whose deep retail management experience and extensive retail tenant networks can be drawn upon to maximise returns for our investors while also supporting each centre’s management team and retailers,” Mr Ford said.

“We are well on our way to scaling our retail exposure towards in excess of $1bn and during an attractive point in the retail sector cycle.”

Mr Ford said the centre offered “strong defensive income based on its largely non-discretionary retail mix, positive growth indicators for the region and limited new supply of retail assets in the CBD”.

Parkstone executive director and co-founder Christopher Day said the group was gaining a greater foothold into the flourishing Orange region, with its population growing in step with a thriving economy largely driven by diverse industry sectors including tourism, agriculture, health, education, retail, mining and government.

The pair’s first retail joint venture was set up in early 2024, when they acquired Bundaberg’s 21,000sq m Hinkler Centre in central Queensland.

“Orange is experiencing strong and sustained population growth driven by diverse employment opportunities, government infrastructure spending and access to quality services including health and education facilities,” Mr Day said.

“These economic drivers are underpinned by more affordable housing options compared to the state capitals that are leading to sustained growth in the regions, underscored by surging migration numbers.”