Vicinity Centres has announced the divestments of a 100% interest in Corio Central in Victoria and a 25% interest in Mt Ommaney Centre in Brisbane for a combined value of $195.5 million.
CBRE’s Head of Retail Capital Markets, Simon Rooney negotiated the sales, with Corio Central acquired by IP Generation Pty Ltd for $101.0 million and the quarter stake in Mt Ommaney Centre purchased by YFG Shopping Centres for $94.5 million.
“While retail transaction volumes have decreased in 2019, we are now seeing clear signs of more positive investor sentiment and heightened enquiry levels for retail assets,” Mr Rooney said.
“There is general acknowledgement that the retail sector has been over-sold, and that stabilised, better quality assets with an obvious growth and value add profile represent an attractive value proposition compared to other sectors.”
Mr Rooney added: “An increasing number of these strategic retail assets, that have traditionally been long term institutional holds, are now presenting themselves. The opportunity to acquire these core and core plus retail holdings, at either current or recalibrated values, is becoming very appealing as evidenced by current and soon to be announced transactions.”
IP Generation is a property-based investment syndication which has completed over $250 million of property transactions within the past 12 months.
Mr Rooney said Corio Central provided the group with a sub-regional centre securely anchored by Coles, Woolworths and Kmart on leases until at least 2025 – representing 44% of the gross lettable area (GLA).
Situated in an established northern Geelong suburb, approximately 68km south-west of the Melbourne CBD, the 31,052sqm centre benefits from a diverse tenant mix with major, chain and national retailers providing 87% of the GLA.
“Investors are targeting subregional centres like Corio Central, which have a strong non-discretionary tenant mix and provide a solid convenience centre offering,” Mr Rooney said.
“In this instance, interest was underpinned by the significant investment occurring in Geelong, boosted by the recently announced Geelong City Deal – a 10-year partnership between the Federal and State Government which will provide the city with a $1.1 billion economic boost.”
The 25% stake in the Mt Ommaney Centre has been acquired by YFG Shopping Centres, a family business which controls 20 shopping centres in south-east Queensland, including Australia Fair on the Gold Coast and Brookside Shopping Centre in Brisbane's north.
The largest and most dominant shopping centre in the trade area, Mt Ommaney has a total GLA of 56,469sqm, over 20,000sqm larger than the next most significant retail centre.
“YFG was attracted to the unique opportunity to acquire a 25% interest in a major metropolitan Brisbane shopping centre with the potential to acquire management rights,” Mr Rooney said.
“The centre is anchored by a triple supermarket offer of Coles, Woolworths and ALDI, together with a triple discount department store offer of Kmart, Big W and Target. It continues to benefit from the extensive population growth occurring in the region and provides significant future redevelopment opportunities.”
This includes an approved development application for a 11,481sqm expansion, including the introduction of a state-of-the-art cinema, casual dining precinct and entertainment destination together with an improved bus interchange and increased parking.
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
