Lendlease’s Australian Prime Property Fund (APPF) Retail and co-owner Lendlease Group have exchanged contracts on the sale of Craigieburn Central to IP Generation for a gross price of $300 million (excluding transaction costs and settlement adjustments).
IP Generation is one of the most active investors in the Australian retail market, having acquired circa $1 billion in shopping centres since 2021, including its most recent purchase of ASCF’s 50% stake in Western Australia’s Rockingham Centre for $180 million. This transaction is IP Generation’s largest individual shopping centre acquisition to date, growing its assets under management to $1.5 billion.
Andrew Coutts, Head of Funds Management, IP Generation said: “Emerging repricing within the retail property market has provided a unique setting for nimble private equity style investors to secure core, stabilised retail assets such as Craigieburn Central on favourable pricing terms. We believe the acquisition presents an exceptional value proposition for IP Generation and our investors in the current economic environment.”
“Craigieburn Central is IP Generation’s largest individual shopping centre acquisition to date and is a valuable addition to our robust and growing portfolio of retail real estate. We look forward to continuing to invest in high-quality retail assets that deliver compelling returns for our investors.”
Developed by Lendlease and opened in 2013, Craigieburn Central is a dominant 64,837m2 Town Centre retail destination generating approximately $378 million of Moving Annual Turnover (MAT). The centre’s accessibility, quality and scale are unrivalled within its fast-growing trade area, which services more than 200,000 residents. The centre has exhibited strong trend sales growth, with centre MAT and specialty sales productivity rising 26% and 25%, respectively, year-on-year.
Craigieburn Central has long been a sought-after asset due to its location in a growing catchment area, mix of quality tenants and value-add potential. The centre is anchored by a triple supermarket offering of Woolworths, Coles and ALDI, in addition to Kmart, Big W and United Cinemas. The comprehensive national major tenant profile accounts for a substantial 50% of centre GLA and MAT with a long-term secure weighted average lease expiry (WALE) 9.8 years.
Strategically situated as the focal point of the major growth development corridor in Melbourne’s northern suburbs, the centre is positioned to be a major beneficiary of considerable ongoing infrastructure investment and forecast population growth within the trade area. Forecast population growth, together with retail price inflation, is expected to continue to support MAT growth for the centre in the medium term.
The acquisition also includes 76,000m2 of surplus land surrounding the centre. The surplus land presents meaningful opportunities for IP Generation to unlock additional value through well-considered and master-planned mixed-use development that complements the main town centre.
Adam Davis, Head of Property, IP Generation: “Craigieburn Central is cemented as the dominant shopping centre within its catchment through the provision of superior convenience, accessibility and the depth of its category offerings. We intend to capitalise on these features and further reinforce Craigieburn Central as the true northern ‘Town Centre’ through the application of an intensive, hands-on asset management approach generating increased operating efficiencies for the centre.”
“We intend to further drive the strong performance of the centre and will actively explore options to unlock the intrinsic value of the surplus landholdings.”
Simon Rooney, CBRE’s Head of Retail Capital Markets, Pacific, negotiated the sale on behalf of the vendors, representing the largest retail transaction in Victoria since 2018 and nationally since December 2021. The deal represents the most competitive outcome for a regional shopping centre since the sale of the Grand Plaza Shopping Centre in Brisbane, which CBRE sold to EG Funds on behalf of Invesco in early 2022.
Rooney noted, “The sale was a highly competitive pricing outcome for APPF Retail and Lendlease, simply reflective of the attractive inherent, long term and deep value fundamentals Craigieburn Central offers, valued accordingly by proactive private capital that dominates the retail investment landscape across Australia at present.”
“The retail sector is set to benefit from migration, resilient spend in the face of already high-interest rates and very low new supply in the market after a period of under-investment in the sector.”
