Lendlease’s Australian Prime Property Fund Retail has sold the Caneland Central Shopping Centre in Mackay, Queensland for $280 million in one of the biggest shopping centre deals of 2022.
A private syndicator acquired the centre, which is the largest shopping centre north of the Sunshine Coast.
The centre, which has 66,000 sqm of gross lettable area, was anchored by a Myer department store, Woolworths and Coles supermarkets, Big W and Target discount department stores, and about 180 specialty retailers.
The deal comes at a time when retail spending and shopping centre fundamentals have performed above expectations in 2022, according to JLL’s Head of Research – Capital Markets, Andrew Quillfeldt.
“The combination of revenue growth for many retailers and rebasing of rents has helped restore occupancy cost ratios to more sustainable levels,” Quillfeldt said.
“While capital has been cautious towards assets of scale, across all sectors, we anticipate there will be a rebound in investment demand as we approach the peak in the interest rates cycle in 2023 and there is more clarity about the macro-outlook and future funding costs.”
Caneland Central
JLL’s Nick Willis and Sam Hatcher managed the Caneland Central sale.
Hatcher said the sale of Caneland Central brought retail investment to $5.8 billion in 2022 (YTD), suggesting 2022 would be within the range of a typical year of $6-8 billion per annum.
“Syndicates are still the lead buyers for major retail assets in this environment and continue to be an important source of liquidity in the retail sector,” Hatcher said.
“Early-movers will have a broad cross section of opportunities as we move into the next phase of the investment cycle, particularly those that can largely equity fund transactions.
Hatcher said Caneland Central was the only 100% interest Regional Shopping Centre to have sold in 2022.
Willis said the value proposition for major retail assets was compelling despite higher debt costs, because initial yields are attractive, and valuations were reset in 2020.
“In this instance, the sale of Caneland Central was originally agreed in April 2022, prior to the RBA’s monetary policy tightening, and was concluded in November 2022 following a 275-basis point increase to the cash rate,” Willis said.
Caneland Central opened in 1979 and underwent $230 million refurbishment and expansion in 2011.
It is one of the strongest performing regional assets across Queensland, recording over 5.6 million annual visitations and a low average occupancy cost ratio across the specialty tenants of just 11.7%.
