Centuria acquires $15m Margaret River Shopping Centre
- Anchored by a strong performing Coles Supermarket, trading 10% above single supermarket benchmarks1
- Margaret River has one of Australia’s fastest growing regional populations, 3.5% p.a. growth2
- Underpins a new single asset wholesale property trust; forecast initial 5.75% p.a. distribution yield; monthly distributions.
Australasian real estate funds manager, Centuria Capital Group (ASX:CNI), has secured the Margaret River Shopping Centre, WA, for $15 million, reflecting a 6.47% initial passing yield.
Located at 132 Bussell Highway in the heart of the Margaret River, the daily needs retail transaction was secured from a local vendor. The acquisition will underpin the Margaret River Shopping Centre Trust (MRSCT or Trust), a single asset, closed ended wholesale property fund, providing a forecast initial starting distribution yield of 5.75% p.a..
The single level shopping centre is anchored by a Coles Supermarket and Liquorland, which collectively lease 2,713 sqm3, and three complementing specialty shops, totalling 280sqm. Specialty stores include a Brumby’s bakery, Bob’s Shoe Store and jeweller, Glitterati.
Approximately 81% of the shopping centre’s gross income is derived from the Coles Group and this particular supermarket’s Moving Annual Turnover (MAT) is 10.2% above the Urbis 2021 ‘Single Supermarket’ benchmark1.
The asset is 100% occupied4 and provides a 2.8 year Weighted Average Lease Expiry (WALE)5, enabling Centuria to draw on its strong inhouse asset management and leasing capabilities to execute value-add strategies.
The acquisition adds to Centuria’s existing $1.7 billion daily needs retail platform6.
Jason Huljich, Centuria Joint CEO, said, “This acquisition exemplifies how we are executing our corporate strategy to secure value-add opportunities to match specific profiles within our broad unlisted investor network. We are adopting a disciplined approach to our real estate transactions and are excited to offer this opportunity to our HNW investor base.”
Bruce McCully, Centuria Head of Retail added, “The Margaret River Shopping Centre adds to Centuria’s strong convenience, neighbourhood shopping retail platform. The daily needs retail sector throughout Australia continues to experience strong tailwinds, underpinned by non-discretionary spending, which makes it somewhat resilient to wider economic impacts.
“In particular, this shopping centre supports a burgeoning local community with the Australian Bureau of Statistics (ABS) showing the Margaret River region as having one of Australia’s fastest growing regional populations. The region benefitted from a robust 3.5% p.a. population growth between 2011 and 2021, significantly above Western Australia and Australia’s growth of 1.6% p.a. and 1.4% p.a., respectively. These favourable metrics provide us with the confidence to execute a favourable value-add leasing strategy.”
The Margaret River Shopping Centre was originally constructed in 2001 by Coles Property Developments and has been maintained to a high standard. It is positioned within the heart of Margaret River Town Centre, with over 50 metre frontage to the main street. Margaret River is c.270km south of Perth’s CBD.
MRSCT will provide an initial 10-year term and monthly distributions7. It has a minimum entry investment of $250,000. Centuria will seek to raise $9.15 million to launch the Trust. The Trust will launch in early February. Settlement is expected in late March 2023.
CBRE’s James Douglas and Chloe Mason, and VPG Property’s, Craig Butler & David Walser represented the vendor.
1. Margaret River Shopping Centre’s Coles supermarket tenancy has a MAT exceeding $14,500/sqm, 10.2% above the Urbis 2021 ‘Single Supermarket’ benchmark of $13,200/sqm
2. Source: Australia Bureau of Statistics (ABS)
3. Gross Lettable Area (GLA)
4. As at December 2022.
5. WALE by income, as at 31 March 2023
6. As at 30 June 2022
7. Distributions will be paid if declared by Centuria Property Funds No. 3 Limited and will be subject to the terms set out in the Information Memorandum expected to be issued on or around 31 January 2023.
Centuria Capital Group secures a $70.6 million industrial logistics facility in North Rocks, NSW, on behalf of US private investment firm, Starwood Capital’s, Last Mile Logistics Partnership (LMLP).
Centuria Capital Group has successfully exchanged conditional contracts to divest two adjoining industrial facilities located at 114 and 120 Old Pittwater Road, Brookvale NSW, which is anticipated to deliver a forecast 13.8% IRR to the assets’ closed-ended fund investors.