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Centuria secures $16m Busselton Boulevard Shopping Centre, WA

  • Daily needs neighbourhood shopping centre, anchored by Coles Group
  • 15 complementary specialty stores, 3.25 year WALE1, 99% occupancy2
  • Beachside Busselton City to benefit from major Federal and State urban regeneration projects
  • Underpins a new single asset wholesale property trust; forecast initial 7.50% p.a. distribution yield.

Australasian real estate funds manager, Centuria Capital Group (ASX:CNI), has secured the c.4,800sqm3 Busselton Boulevard Shopping Centre, Western Australia, from a local vendor for $16 million, reflecting a 9.19% initial yield and a forecast internal rate of return (IRR) exceeding 13%.

The daily needs neighbourhood shopping centre is anchored by a c.3,150sqm Coles Supermarket and provides a 3.25 year WALE1 and 99% occupancy2. Located on 69 Prince Street, Busselton, the single storey shopping centre benefits from a further 15 convenience retailers including a chemist, newsagent, fish monger, butcher, bakery, medical centre, ATM and specialty shops.

92% of the centre caters to food and non-discretionary spending.

Bruce McCully, Centuria Head of Retail, said, “This was a rare opportunity to secure a high performing neighbourhood shopping centre that provides a resilient revenue stream underpinned by non-discretionary spending. The asset further benefits from its excellent location, within the heart of the Busselton community, surrounded by an adjacent on-grade car park, holiday accommodation, civic and community infrastructure and is less than a kilometre from the iconic Busselton Jetty.

“Furthermore, the beachside city of Busselton, which is supported by seasonal tourism as well as a growing populationiv, is set to further benefit from State and Federal urban regeneration projects.”

Among the area’s Government-backed projects is the Busselton Foreshore Redevelopment – including the restoration of the Busselton Jetty (longest jetty in the southern hemisphere), upgrading the Busselton Margaret River Airport – which will enable direct flights from Melbourne and Sydney, and a local road network upgrade programme.

Jason Huljich, Centuria Joint CEO, added, “This acquisition is another example of Centuria securing high performing, quality retail assets within WA communities that will benefit from growing economies, driven by population growth4. We continue to secure value-add opportunities to match specific profiles within our broad unlisted investor network and are pleased to provide a new investment vehicle to our HNW investor base.”

The Busselton Boulevard Shopping Centre follows the success of Centuria’s Margaret River Shopping Centre Trust, which was established in January 2023 and was fully subscribed.

The Busselton transaction will underpin a single-asset, closed-ended wholesale property trust, the Busselton Boulevard Shopping Centre Trust (BBSCT) (Trust). BBSCT provides a forecast initial starting distribution yield of 7.50% p.a., monthly distributions and an initial five year term. It has a minimum entry investment of $100,000.

Centuria will seek to raise c.$10.7 million to launch the Trust with an anticipated launch date in July. Settlement is expected in late August 2023.

The acquisition adds to Centuria’s existing $1.7 billion daily needs retail platform5.

Busselton is located 230km Southwest of Perth, neighbouring the Margaret River region.

CBRE’s James Douglas and Chloe Mason, and VPG Property’s, Craig Butler & David Walser represented the vendor.

1. Weighted Average Lease Expiry (WALE) as at 1 June 2023
2. Occupancy by income as at 1 June 2023
3. Gross Lettable Area (GLA)
4. According to the ABS and RDA South West, between the 2016 and 2021 Census, Busselton experienced a 10.8% surge in its local population
5. As at 31 March 2023