Melbourne-based Nikos Property Group has forged its second partnership with Vicinity Centres (VCX) after exchanging unconditional contracts to acquire a 50% interest in the Broadmeadows Central shopping centre in Victoria for $134.5 million.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney negotiated the off-market sale of the regional shopping centre stake on behalf of Vicinity Centres.
The transaction follows last year’s $138.2 million acquisition by Nikos Property Group of a 50% interest in the Colonnades Shopping Centre in Adelaide, also from VCX.
Under the latest agreement with Nikos, Vicinity will continue to provide centre management and leasing services at Broadmeadows Central, as well as managing any future potential development activity.
Vicinity’s CEO and Managing Director, Peter Huddle, said: “We are delighted to further strengthen our strategic partnership with Nikos by adding Broadmeadows Central to our existing joint interest in Colonnades Shopping Centre in South Australia. We are confident that our collective expertise in retail property investment will drive sustained returns for both parties.”
Rooney added, “The Broadmeadows Central acquisition continues the trend of private investment groups, syndicates and, to a lesser extent, institutional investors taking out passive stakes in retail assets alongside institutional managers. This allows institutional partners to reduce gearing and maximise the use of capital while maintaining management fee income.”
Broadmeadows Central is anchored by Kmart, a triple supermarket offering alongside HOYTS Cinemas and more than 115 specialty stores
The Broadmeadows Central transaction was struck at a premium to VCX’s 2022 book value, with settlement expected on 30 June 2023.
On the heels of the sale, VCX is moving to sell the adjoining Homemaker Centre Broadmeadows, via a CBRE-managed Expressions of Interest campaign. Launching soon, the campaign will provide an opportunity to acquire a 100% interest in the 33,500m2 asset, amid ongoing investor interest in large format retail investment opportunities.
The Broadmeadows Central acquisition delivers Nikos a half-share in strategically located, 129,703m2 regional centre located 19km north-west of the Melbourne CBD.
The centre is anchored by Kmart, a triple supermarket offering of ALDI, Coles and Woolworths, alongside HOYTS Cinemas and more than 115 specialty stores.
Rooney said the VCX offering had attracted interest from various parties, highlighting the continued appetite for well-located, professionally managed centres in metropolitan locations.
“There is a continued bifurcation between these types of assets and centres in regional locations, albeit sub-regional centres that dominate their catchments are still highly sought after,” Rooney said.
