HMC Capital (HomeCo) has acquired two shopping centres in Sydney and Perth from Lendlease’s Sub-Regional Retail Fund in deals totalling $242.5 million.
The acquisitions of Southlands Boulevarde in Perth for $92.5 million and Menai Marketplace in Sydney for $150 million were said to represent Australia’s largest sub-regional retail portfolio transaction since 2018.
Located about 30 kilometres south-west of the Sydney CBD, Menai Marketplace was an established and dominant centre within a densely populated and highly affluent trade area of some 164,000 people.
Southlands Boulevarde was located about 12km south of the Perth CBD and was the largest centre in its trade area of over 84,000 people.
The deal follows Lendlease’s Australian Prime Property Fund Retail’s sale of the Caneland Central Shopping Centre in Mackay, Queensland for $280 million this week.
The sales highlight the continued investor focus on sub-regional shopping centres, with more than $775 million in assets transacted year to date.
JLL’s Nick Willis and Sam Hatcher together with CBRE’s Simon Rooney and James Douglas sold the portfolio.
Hatcher said the sub-regional investment market emerged post-COVID as the powerhouse sub-sector of the retail investment market, with the land-rich nature of these centres, diverse income profiles and dominance within their trade areas continuing to attract a deep and diverse buyer pool.
Willis said overall transaction volumes year to date were significantly down on the record 2021 volumes that reached over $13 billion.
Total volumes were expected to reach $6 billion – including the sale of Caneland Central, Southlands Boulevarde and Menai Marketplace – showing over a 50% decline in transactions.
“However, the Sub-Regional sector has attracted the greatest weight of capital,” Willis said.
“This demand for the sub-sector has been evidenced by the sheer transaction volumes totalling 14 sub-regional transacting totalling approx. $1.64 billion and 5% above the 5-year average.”