Melbourne, 1 July 2013- Investment bank Moelis & Co has acquired Victoria’s Healesville Walk Shopping Centre for $21.2 million as the founding asset for its Australian Property Visa Fund.
The fund is targeting holders of the new '888' Significant Investor Visa, which allows holders and their immediate family to work, study or travel to and from Australia over four years.
CBRE’s Mark Wizel and Justin Dowers negotiated the sale of Healesvville Walk with Minters acting on behalf of Australand and BOSI, while RetPro and Hall & Willcox acted on behalf of Moelis. The $21.2 million sale price reflects an initial yield of 7.6%, with the centre fully leased at the date of sale.
Moelis & Co Managing Director, Andrew Martin, said the visa fund would manage real estate investments for holders of the Australian Significant Investor Visa.
“The fund’s investors have a strong appetitive for Australian commercial property investments with strong stable cashflows from major tenants,” Mr Martin said.
“Healesville Walk represents a very good fit for this fund given the stability of the asset underwritten by consistent strong performance of the anchor tenant, a Coles Supermarket.”
Enda Stankard, Fund Manager of the Moelis Australian Asset Management Visa Fund, said the intention for the fund was to invest directly in Australian commercial real estate assets and also from joint venture investments.
Healesville Walk is located on the eastern outskirts of Melbourne, some 52 kilometres from the Central Business District. The 4,971sqm neighborhood shopping centre is anchored by Coles and includes 12 specialty shops.
CBRE’s Mr Wizel said the Australian commercial property market had attracted rising Asian investor demand, however the focus in recent years has primarily been on inner city development assets. In Melbourne alone, over $610 million in sites have been sold to Asian investors since Q4 of 2010.
However, Mr Wizel said there had been a recent shift in demand towards investment grade assets.
“This trend is expected to continue, especially when Asian groups can partner with local property experts such as Moelis & Co,” Mr Wizel said.
CBRE’s Mr Dowers said the Victorian retail investment market had attracted significant interest in 2013, with the sales of Hogans Corner, University Hill, Bacchus Marsh Village Shopping and the Lascorp Portfolio to SCA Property Group giving greater evidence that yield compression has occurred this year.
“The drivers of yield compression in this market segment are primarily the low cost of debt, and the continued demand / supply imbalance in the neighbourhood shopping centres market, especially in Victoria,” Mr Dowers said.
“Local financiers have also shown an appetite to increase their exposure to non-discretionary retail properties in Victoria over the past six months, which has underpinned a number of recent transactions.”
In June alone, $220 million in Victorian neighbourhood shopping centres have changed hands, including MAB’s sale of University Hill Town Centre, Abacus’s purchase of Bacchus Marsh Village Shopping Centre, the sale of Braybrook Shopping Centre and SCA Property Group’s $130 million acquisition of the Lascorp portfolio.
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