An EG fund has bought a half stake in the Grand Plaza shopping centre in Brisbane from US investment manager Invesco at an acquisition core capitalisation rate of close to 5.25%.
Grand Plaza comprised 53,288 sqm of gross lettable area on a large 181,090 sqm site, with car parking facilities for approximately 2,500 cars.
The property was anchored by Woolworths, Coles, Aldi, Kmart, Big W, Target and Events Cinemas, with major, national and chain retailers representing 94% of the total lettable area and approximately 92% of the gross passing income.
EG’s Australian Core Enhanced Fund purchased the sub-regional shopping centre in Browns Plains, located 22km south of the Brisbane CBD. The sale price was not disclosed.
“Value can be extracted from this asset with an active asset management strategy to enhance the retail offering and tenant mix,” said EG’s Head of Capital Transactions Sean Fleming.
“Based on the data EG has interrogated, Grand Plaza mall is expected to benefit from the anticipated capital growth and cap rate compression across Australian retail markets in 2022.”
The other 50% stake in the property was held by Vicinity Centres.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney negotiated the deal on behalf of the seller.
Rooney said the sale highlighted rising demand for sub-regional shopping centre investment opportunities and continued a run of retail investment activity in Queensland.
“There has been a surge in capital flows into the sub-regional sector, fuelled by a rebasing in values and rents and the attractive yields on offer compared to other asset classes,” Rooney said.
“The Grand Plaza transaction also highlights continued strong demand for Queensland retail investments, with over $4.5 billion in sales occurring since the beginning of 2021.”
Recent retail deals in Queensland include IJ Capital selling the Benowa Gardens shopping centre on the Gold Coast this week for $60.5 million, representing a passing yield of 4.99%.
Earlier this month, a private investor bought the Woolworths-anchored Fernvale Village shopping centre, located an hour west of Brisbane, for $35.55 million, while Dexus Convenience Retail REIT bought a pair of service stations on the Sunshine Coast for $21.25 million, reflecting a purchase yield of 4.9%.
Centuria Capital Group acquired a $202 million retail precinct within a major mixed-use development in Brisbane’s West End last month, following Stockland and AMP Capital’s disposal of the Coles Kmart Plaza shopping centre in Townsville for $47.25 million at a fully leased yield of 5.46% in January.
In December last year, YFG Shopping Centres bought the Strathpine Centre in Brisbane for $267 million, as AMP Capital Shopping Centre Fund purchased the remaining 20% of Pacific Fair shopping centre on the Gold Coast for $336.4 million.
Interested in the retail property market? Take a look back at Australia’s biggest single retail sales in 2021.
