Centuria Capital Group has secured the Margaret River Shopping Centre, WA, for $15 million, reflecting a 6.47% initial passing yield. The acquisition adds to Centuria’s existing $1.7 billion daily needs retail platform.
The Margaret River Shopping Centre was originally constructed in 2001 by Coles Property Developments and has been maintained to a high standard. It is positioned within the heart of Margaret River Town Centre, with over 50-metre frontage to the main street.
The single-level shopping centre is anchored by a Coles Supermarket and Liquorland, which collectively lease 2,713m2, and three specialty shops, totalling 280m2. Specialty stores include a Brumby’s bakery, Bob’s Shoe Store and jeweller, Glitterati.
Approximately 81% of the shopping centre’s gross income is derived from the Coles Group, and this particular supermarket’s Moving Annual Turnover (MAT) is 10.2% above the Urbis 2021 ‘Single Supermarket’ benchmark.
The asset is 100% occupied and provides a 2.8-year Weighted Average Lease Expiry, enabling Centuria to draw on its strong in-house asset management and leasing capabilities to execute value-add strategies. The acquisition will underpin the Margaret River Shopping Centre Trust (MRSCT or Trust), a single-asset, closed-ended wholesale property fund, providing a forecast initial starting distribution yield of 5.75% pa.
Jason Huljich, Centuria Joint CEO, said, “This acquisition exemplifies how we are executing our corporate strategy to secure value-add opportunities to match specific profiles within our broad unlisted investor network. We are adopting a disciplined approach to our real estate transactions and are excited to offer this opportunity to our HNW investor base.”
Approximately 81% of the shopping centre’s gross income is derived from the Coles Group
Bruce McCully, Centuria Head of Retail added, “The Margaret River Shopping Centre adds to Centuria’s strong convenience, neighbourhood shopping retail platform. The daily needs retail sector throughout Australia continues to experience strong tailwinds, underpinned by non-discretionary spending, which makes it somewhat resilient to wider economic impacts.
“In particular, this shopping centre supports a burgeoning local community with the Australian Bureau of Statistics showing the Margaret River region as having one of Australia’s fastest-growing regional populations. The region benefitted from a robust 3.5% pa population growth between 2011 and 2021, significantly above Western Australia and Australia’s growth of 1.6% pa and 1.4% pa, respectively. These favourable metrics provide us with the confidence to execute a favourable value-add leasing strategy,” said McCully.
Located at 132 Bussell Highway in the heart of the Margaret River, approximately 270km south of Perth’s CBD, the daily needs retail transaction was secured from a local vendor. The campaign was managed by CBRE’s James Douglas and Chloe Mason, and VPG Property’s, Craig Butler and David Walser.
Douglas noted, “The public sale process for Margaret River Shopping Centre drew significant interest from institutional and private capital sources demonstrating the continued demand for assets with a sustainable number of specialty retailers focused on non-discretionary spending”.
Butler added, “Investors were attracted by the centre’s exceptional income security coupled with Coles sales performance which benefits from dual catchments including permanent residents as well as a burgeoning tourism influence”.
“Margaret River Shopping Centre continues to benefit from robust growth within the Margaret River region and a push to regional living witnessed over the past few years, and this is evident by Coles exceptional sales performance,” said Douglas.
This transaction follows CBRE’s recent sales of Forest Lakes Shopping Centre and Southlands Boulevard within WA, totalling $198 million.
