Dexus has divested its 50% non-management stake in Stockland Townsville on behalf of the recently acquired AMP Capital Shopping Centre Fund for $115 million in a deal that marks the first regional classified shopping centre to trade since November 2022.
Sydney based property fund manager Haben Property Group successfully acquired Stockland Townsville, a 45,021m2 retail mecca for the wider Townsville region. The centre underwent a substantial $180 million redevelopment and expansion in 2012 and features the only department store within a 345km radius.
JLL’s Nick Willis and Sam Hatcher exclusively sold Stockland Townsville via an on-market Expressions of Interest (EOI) process that received strong levels of investor interest due to the relatively low price point to acquire an interest in a dominant regional shopping centre.
Stockland Townsville’s performance has continued to accelerate in recent years, with 99.5% occupancy and more than $278 million in total centre sales. More than 52 tenants within the centre are unique to Stockland Townsville throughout the whole region, providing a substantial point of difference for the asset.
Willis said: “The transaction reaffirms liquidity for the regional sub-sector, in addition, the continuing trend of new capital emerging for interest in institutional-grade retail assets. In the last three years we have seen 16 partial interests trades, totalling more than $3.75 billion of capital, of which 60% was maiden. This has included a mix of super funds, syndicators and private investors, such as Nikos Property, which acquired 50% of Colonnades Shopping Centre in South Australia; this was their first foray into shopping centres.”
On the superfund front, both Cbus and Aware Real Estate have made initial plays into the sector, with Cbus acquiring interest in both Macquarie Centre (Sydney) and Pacific Fair (Gold Coast) alongside UniSuper, and Aware Real Estate acquiring a 50% interest in Sunshine Marketplace in Melbourne.
Given the lack of available opportunities during the last 12 months, this is forcing groups to change strategies or normal course of management in order to get access to quality opportunities. This includes Haben acquiring a 50% interest in Stockland Townsville, marking the group’s first non-management 50% interest acquisition.
“Globally we are seeing capital re-emerge for retail assets, due to the growing evidence of assets’ forecast performance, relative value and underlying land and multifaceted nature, compared to other sectors,” said Willis.
Anchored by Myer, Woolworths, and Big W, Stockland Townsville features seven mini-majors and 128 specialties
The transaction of Stockland Townsville coincides with a period of ultra-low supply in the retail sub-sector. Transactions for 1H23 are 50% down on 1H22 and with only 30 transactions being recorded in 1H23, this makes it the lowest half year on record by deal count.
Hatcher said: “Stockland Townsville has continued to benefit from the strong economic performance of the wider Townsville region. Rent collection in the centre has been at 100% for a consecutive 25 months, which has led to positive leasing spreads now being achieved on several recent leasing transactions.”
Anchored by Myer, Woolworths, and Big W, Stockland Townsville features an additional seven mini-majors and 128 specialty tenants. Located in a relatively affluent location of Townsville with average incomes 7% above the non-QLD metro average, Stockland Townsville occupies a key strategic corner site with prime street frontages providing exposure to more than seven million passing vehicles per annum.
Managing Director of Haben, Ben Finger, said: “Haben is pleased to add Stockland Townsville to our growing portfolio. The opportunity is on strategy with our business to provide stable and higher returns for our investors in this higher interest rate environment. Our portfolio is very focused on robust retail assets with strong underlying land that provide mixed use development opportunities. We continue to see our centres trade with exceptionally strong sales growth, low vacancy, and positive rental spreads.”
Willis said: “Regional shopping centres are characterised by their dominance and size, and typically come with price points in excess of $300 million. This transaction provided an opportunity for capital to acquire a Regional centre at a relatively affordable entry price point and benefit from the fortress fundamentals that Regional shopping centres offer.”
Hatcher added: “Purchasers during the process were not only drawn to the performance of the asset, but also the future development potential, given that the centre is situated on 9.4ha of land which includes two additional development sites.”
