Lifestyle Zone Ocean Keys sells for $50.3 million in Perth’s burgeoning northern growth corridor

An Adelaide-based private investor has acquired Lifestyle Zone Ocean Keys, a 14,041sqm large format retail (LFR) centre 35km north of the Perth CBD, from Baron Vanilla for $50.3 million on a passing yield of 7.00%. 
 
The transaction follows a highly competitive off-market sales process for the high-growth LFR centre, which drew interest from domestic institutional capital as well as syndicators and high-net-worth private investors.

CBRE’s James Sherley, Lachlan Andrew, Beau Coulter, Chloe Mason and James Douglas exclusively managed the sale campaign on behalf of Baron Vanilla.

The modern centre is anchored by national retailers including Club Lime, Dave & Buster’s, Petbarn, Salvation Army, Supercheap Auto and Bridgestone, securely leased with a weighted average lease expiry (WALE) of 5.3 years and 77% of gross tenant income secured to national and multi-site
operators.

Located within one of Perth’s strongest growth corridors, Lifestyle Zone Ocean Keys occupies a significant, high-profile site of 32,387sqm, strategically positioned within a strong performing and established retail precinct including Ocean Keys Shopping Centre, Woolworths Clarkson and Bunnings Mindarie.

CBRE’s Senior Director of Retail Capital Markets James Sherley noted, “Investors were attracted to the robust income growth profile, with the centre fully occupied, all leases subject to fixed annual rental reviews and strong expense protection with approximately 90% of outgoings recovered, providing minimal leakage of income growth.”

CBRE’s Associate of Private Wealth, Lachlan Andrew added, “Constrained supply and historically low vacancy have placed significant pressure on LFR rents, providing investors substantial and ongoing rental growth prospects, with clear upside being provided through tenant mix repositioning.”

Miles Ashton, Director of Baron Vanilla Management, said he was pleased to announce the successful settlement of the BV Lifestyle Zone Trust property at 61 Key Largo Drive, Clarkson. 

“Capitalising on strong market demand for premier large-format retail assets, the sale delivers an excellent outcome for our investors, achieving a projected total return in excess of a 13% IRR over the 5-year Trust term," he added.