Centuria Capital subsidiary Primewest has bought a shopping centre in Geraldton, WA from a Lendlease fund for $71.2 million, growing its portfolio of retail properties across the country.
The Northgate Geraldton shopping centre comprises 15,758sqm of gross lettable area, with tenants including Coles, Kmart, Red Dot and 28 specialty shops.
Primewest Head of Retail Bruce McCully said the shopping centre was located in one of WA’s most populated areas.
“Northgate Shopping Centre is the dominant retail precinct within Greater Geraldton, servicing a catchment of circa 51,000 people across a 385km area, which provides a strong competitive advantage,” Mr McCully said.
“It benefits from strong tenant covenants with 80% of the property’s gross income derived from ASX-listed, national and multinational tenants.”
The shopping centre has a Weighted Average Lease Expiry (WALE) of 4.7-years, with Kmart recently commencing a new 10-year lease.
Geraldton is approximately 400km north of Perth’s CBD, strategically located in the heart of WA’s Mid-West region.
The buyer will hold the asset in a single-asset, unlisted closed-ended wholesale fund, with a forecasted annual distribution of 7.25% within the first two years.
The property was acquired from Lendlease’s Sub Regional Retail Fund, which introduced Kmart to the shopping centre as part of its repositioning strategy.
Scott Mosely, Managing Director of Investment Management at Lendlease, said the strategic divestment of Northgate represented a strong outcome for investors.
“Sub-regional shopping centres focused on essential convenience and service offerings have generally performed well over recent years and this has influenced positive investor sentiment towards the sub-sector,” Mr Mosely said.
“More broadly, the outlook for retail remains positive and confidence is returning to the sector, evidenced by strong transactions in the first half of this year.”
Primewest said the regional city has a favourable retail environment due to its diverse economy and employment opportunities, stable and growing population, and affordable housing.
The deal grows Primewest’s retail real estate portfolio to more than $2.6 billion of daily needs and large format assets.
JLL’s Nick Willis and Sam Hatcher steered the sale of the Northgate shopping centre.