Australian real estate funds manager, Centuria Capital Group has bought Halls Head Central shopping centre for $70 million.
The eye-watering price appears to be a bargain, with Centuria pointing to an independent assessment by CBRE showing it was secured at about 40 per cent below its independently assessed replacement cost.
The property — sold by Vicinity and ISPT — adds to Centuria’s its $3.2billion retail assets under Centuria management.
The sale has prompted speculation of a new onsite development, with the current shopping centre covering only 22 per cent of the nine hectare site, leaving 10,000sqm of surplus land.
Jason Huljich, joint chief executive of Centuria, said it was a compelling, counter-cyclical investment opportunity within WA’s second largest city, Mandurah.
“The centre benefits from a high proportion of non-discretionary retailers while presenting value-add opportunities through tenant remixing or potential redevelopment,” he said.
“WA remains a standout state for retail property.
“Greater Perth’s population has increased by 3.6 per cent throughout the previous 12 months, and when coupled with low forecast retail supply and vacancy, it provides compelling fundamentals for the retail sector.”
The 19,373sqm mall is anchored by supermarkets Coles and ALDI, as well as discount department store Kmart, and has parking for 960 cars.
The shopping centre includes 50 speciality shops and two freestanding pad sites, and is visited 2.4 million times a year.
It has a 247-metre street frontage with 40,500 passing vehicles each day, or nearly 15 million cars a year. Halls Head is about 75km south of Perth’s CBD.
It is understood the property last sold as part of a multideal including other properties for a total of $145 million in 2013. The last time it sold as one entity, it fetched $7 million, in 2001.
Bruce McCully, Centuria Head of Retail, said the shopping centre was Centuria’s third biggest retail asset in Mandurah.
“Centuria has deep market experience within the region, actively managing the Erskine Shopping Centre and Mandurah Greenfields Shopping Centre,” he said.
“With limited new supply of retail assets, due to construction supply pressures, coupled with a strong population growth, we believe tenant demand will continue to outstrip supply for well-maintained subregional shopping destinations across Western Australia.”
The Centuria Halls Head Central Fund will provide an initial five-year term and is expected to be offered to wholesale investors from Monday May 20.
The fund is seeking to raise $41m, with a minimum investment of $100,000. The forecast starting annual distribution is 8 per cent paid monthly, with a target 13.5 per cent.
Settlement is expected in July 2024.
CBRE’s Simon Rooney and James Douglas were the sales agents.