The Lendlease managed Australian Prime Property Fund Retail (APPF Retail) has exchanged contracts with Fawkner Property for the sale of Cairns Central in Far North Queensland for circa $390 million with settlement expected to occur in late February 2024.
The deal, managed by Lachlan MacGillivray of Colliers and Sam McVay of McVay Real Estate, represents Queensland’s largest regional shopping centre transaction since November 2017, when AMP took out a 50% stake in Indooroopilly Central for $800 million from CSC.
“The sale of Cairns Central represents the second largest retail asset transaction for 2023, following Fawkner’s acquisition of Midland Gate Centre in Perth for $465 million.” MacGillivray said.
“The Cairns Central deal was also one of the few remaining opportunities to secure a 100% interest in a regional shopping centre in this investment cycle. We expect availability of this calibre of product to tighten further in 2024 and beyond.”
“The sale campaign for Cairns Central attracted strong international and domestic buyer demand.” McVay added.
“We were very pleased with the calibre of investors that ran the ruler over Cairns Central, with the outcome being a testament to its outstanding sales performance and market dominance.”
A lifestyle, entertainment and fashion destination for both residents and tourists alike, Cairns Central is one of Australia’s top performers reporting total sales of $511 million per annum. The centre is securely anchored by a Myer, Kmart, Target, Coles, Woolworths and Event Cinemas.
The centre is the only regional shopping centre in the Far North Queensland region and benefits from the large tourist population visiting the area. With a GLA of 51,972m2, Cairns Central boasts a diverse retail mix with over 186 quality tenants.
Cairns Central Centre occupies a landmark 9.4-hectare site, which is directly connected to Cairns Railway station
Anne MacSporran, Fund Manager APPF Retail, Lendlease said: “The sale of Cairns Central is a strong result for APPF Retail investors, particularly in light of market conditions experienced throughout 2023. With the strategic divestment of this asset, APPF Retail will be able to close out the remaining redemption requests in the Fund, providing liquidity to those investors who requested it.
“The outlook for Australian retail is positive. With sales having rebounded strongly post pandemic, and now stabilising to more normalised levels, the sector is supported by robust retail fundamentals, with growing demand and limited supply of retail space being one of the driving forces for future growth.
“APPF Retail is in a strong position to execute its Prime Urban Growth Centre strategy, which focuses on owning and developing multi-purpose assets that dominate their trade areas and drive high-value visitation across a broad mix of shoppers and other customers.”
APPF Retail attracted a high level of interest from prospective buyers for Cairns Central, which was sought after due to its location in one of Australia’s largest regional cities with strong growth forecasts, and a high-quality retail mix which has seen the centre become a desired lifestyle, entertainment and fashion destination for residents and tourists.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney, advised and represented the purchaser, Fawkner Property.
“Opportunities to acquire a 100% freehold interest in a market leading regional shopping centre with management rights are rarely presented. Fawkner Property securing two such opportunities at Midland Gate Perth and Cairns Central demonstrates their strategic and counter-cyclical investment approach,” said Rooney.
The Cairns acquisition continues Fawkner Property’s market leading investment push into the regional and sub-regional retail categories, having acquired $1.7 billion in assets since 2021, including Midland Gate ($465 million) and The Square Mirrabooka in Western Australia ($195 million), Stockland Traralgon in Victoria ($84.5 million) and Mount Pleasant Centre ($162.5 million), Stockland Cairns ($146 million) and Stockland Gladstone ($139 million) in Queensland and Settlement City, Port Macquarie ($107 million).
