Independent property fund manager Argus Property Partners has expanded its South East Queensland portfolio with the $28.85 million acquisition of HomeCo Morayfield.
CBRE Retail Capital Markets’ James Douglas, Joe Tynan and Michael Hedger negotiated the sale of the prominent homemaker centre, which is situated 44km north of the Brisbane CBD in the fast-growing Moreton Bay region.
The sale closely follows that of another HomeCo branded asset at Rutherford in the NSW Hunter Region, which was acquired for $23.2 million by boutique investment house TAMIM Asset Management. CBRE’s Douglas also steered the Rutherford sale amid strong ongoing demand for large format retail assets.
The 11,216m2 Morayfield asset was sold on behalf of Home Consortium following a selective off market sales process, with strong buyer interest and demand resulting in a fully leased sale yield of 6.93% and a strong 5% premium to the Home Consortium December 2020 book valuation.
It is the latest acquisition for Argus Partners Managements Investments Limited, the funds management arm of Argus Property Group, following its December 2020 purchase of HomeCo Bathurst.
HomeCo Morayfield adds to the group’s South East Queensland portfolio, which includes Metro Market at Biggera Waters, the Hope Island Central retail and office complex and the largest office building in the Bermuda Point development at Varsity Lakes.
“The select and competitive EOI sale campaign generated strong buyer interest, underpinned by the asset’s affluent trade area with median household income levels 23% above the Moreton Bay LGA benchmark,” Douglas said.
“The centre’s cashflow, which is secured via an attractive WALE of 5.8 years, also provides exceptional security of income and tenure for the incoming purchaser.”
Opened in 2018, HomeCo Morayfield is a well-presented and securely leased homemaker centre located within one of Australia’s fastest growing urban regions, where the population is forecast to grow by over 40% to more than 645,000 by 2036.
The asset has a strong offer of key destination tenants, namely Nick Scali, Amart Furniture, Sydney Tools, Early Settler and Choice – The Discount Store, with the Nick Scali and Amart Furniture stores being the only offerings by these retailers in the trade area.
“Since the onset of the global pandemic, we have seen a marked increase in capital searching for large format and non-discretionary retail, with a particular focus on assets that provide strong lease covenants and tenure,” Tynan said.
Tynan noted that investor interest had been underpinned by the strong ongoing performance of large format retail categories as a consequence of elevated pandemic-related spending in areas such as home improvements, furniture and electronics.
“This has been reflected in the continued compression in large format retail yields, which tightened by 25bps in both Sydney and Brisbane in Q1 2021,” Tynan concluded.
