Australia Retail Assets

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Mirvac buys shopping centre from partners
BEN WILMOT THE AUSTRALIAN OCTOBER 10, 2014 12:00AM

HEAVYWEIGHT Mirvac Group has snapped up the Birkenhead Point Shopping Centre and Marina in Sydney’s inner west from partners Abacus Property Group and Kirsh Group for $310 million.

The deal is one of a wave of shopping centre transactions that have rippled across Australia over the past week, with TH Real Estate and Federation Centres snapping up a Brisbane centre for $416.25m.

Lend Lease has also just recapitalised a shopping centre fund, with the keenly contested portfolio valued at more than $610m. Funds controlled by Novion and Challenger just missed out on the portfolio.

A half-stake in Greenwood Plaza and 101 Miller is also selling to TH Real Estate for about $310m and Sydney’s Bakehouse Quarter is tipped to sell for more than $300m.

At Birkenhead Point, the vendors had picked up the centre in 2010 for $174m and turned it into an institutional grade outlet centre. Abacus managing director Frank Wolf said: “We have transformed an intricate asset to create a high-quality institutional-grade property.”

Strong competition saw the asset trade on a fully let passing yield of 6.6 per cent and Mirvac sees upside in the centre.

Birkenhead Point sits on a prime waterfront site of about 3.7ha, with a total gross lettable area of over 33,100sq m and parking for 1395 vehicles.

The thriving waterfront centre in Drummoyne could face a further overhaul, with Mirvac flagging value-add plays for the retail component.

There is also the potential to develop 220 apartments over a number of towers.

Mirvac’s group executive, retail, Susan MacDonald said the purchase “presents a unique opportunity for Mirvac to use its retail asset management expertise to continue to remix existing tenancies, with an emphasis on designer and luxury brands”.

“We will also use the opportunity to convert the recently expired David Jones tenancy into more productive specialty space, endorsing Birkenhead Point as Sydney’s premium outlet centre,” she added.

Since May 2013, Mirvac has lifted the quality of its $2 billion retail portfolio by acquiring more than $562m of well-located urban assets, and sold off $324.1m of non-core assets.

Simon Rooney of JLL and Sam and Dan McVay of McVay Real Estate negotiated the sale.

Mr Rooney said “the market for large, high-quality and well-located core shopping centre assets remains strong among domestic, offshore, institutional and high net worth investors”.

Sam McVay noted the purchase complemented Mirvac’s dominant retail holdings in western Sydney.

The Birkenhead centre leases about 70 per cent of its space to national and international brands including Coles, Aldi, Nike, Cotton On and Hugo Boss.

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Retail opportunities abound in NT

Larry Schlesinger
499 words
16 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

A lack of retail space and booming growth projections are the main reasons the Coombes Property Group is building the Northern Territory's biggest mall, scion Michael Coombes said.

Construction of the first stage of the $300 million Gateway mall project in Palmerston, a planned city 20 kilometres east of Darwin, is under way and due for completion by mid-2016.

"The main trade area of Palmerston has a low supply of retail floor space, about half the national average, and forecasts are for this trade area to grow by 50 per cent over the next 10 years," Mr Coombes told The Australian Financial Review.

These market forces created a need for additional retail floor space in Palmerston, Mr Coombes said.

The first two stages of Gateway will comprise a 30,000-square-metre mall housing a Woolworths, Big W, Event Cinemas complex, 60 speciality stores, a restaurant precinct and 350-seat food court, as well as a 14,000-square-metre bulky goods and DIY centre.

Further development stages of the 15-hectare site will include an expansion of the mall and the addition of a four-star hotel and an entertainment precinct.

Mr Coombes said market forces would determine when the next stages began.

The first two stages are being built by local NT contractor, Sitzler.

Currently, the largest mall in the Northern Territory is GPT's $256 million Casuarina Square, in the northern suburbs of Darwin. Built in 1973 it measures 53,500 square metres and is fully leased.

Mr Coombes said Gateway would be the biggest mall in the Northern Territory once fully completed, provided Casuarina Square was not extended over the lifespan of the project.

Approval for Gateway was granted by NT Chief Minister Adam Giles and Planning Minister Peter Chandler in August last year.

Mr Giles said the project would ­create 3000 jobs and boost the local economy.

Two new suburbs, a hospital and two schools are under construction in Palmerston, which had a population of 35,000 people according to the 2011 census.

It's the second biggest city in the Northern Territory behind Darwin, and the fastest-growing city.

The Coombes family has an 80-year history of property ownership in Darwin and owns the Palm City Resort and other retail assets.

The major shareholders are property developers Peter and Helene Coombes.

Ms Coombes is the daughter of the late Chrissie and Michael Paspalis who built up a portfolio of hotels, cinemas and shops in Darwin after the Second World War.

Ms Coombes, her sister Phynea Paroulakis and Chrissie Paspalis were featured on the 1989 BRW Rich List with a $44 million combined fortune.

The Coombes family property interests include offices, retail property, resort and a development landbank.

It has partnered with ASX-listed Mirvac on a $500 million project at Sydney's George Street cinema site, featuring 600 apartments.

A planning proposal was submitted early this year and is currently being assessed.


Fairfax Media Management Pty Limited

Document AFNR000020141015eaag00026

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Charter Hall baulks at expensive shopping centres
THE AUSTRALIAN OCTOBER 18, 2014 12:00AM

Greg Brown

Property Reporter
Sydney
David Harrison
David Harrison of Charter Hall. Source: News Corp Australia
CHARTER Hall’s $2 billion listed retail property trust will scale back its acquisitions this year, saying shopping centres have become too expensive.

Charter Hall Retail REIT fund manager Scott Dundas said the trust would not buy as many properties as last year.

In 2014, Charter Hall Retail, which held its annual meeting yesterday, purchased four centres for a total of $252 million.

“When acquisition yields have compressed to the level that they have, then we are kind of out of that market,” Mr Dundas told The Weekend Australian.

“It makes more sense for us to put money into redevelopments (to grow the portfolio) than chase expensive acquisitions.”

The group completed $84m worth of development work in the year to June and is now overhauling the Lansell Square shopping centre in Victoria’s Bendigo.

As well as development, the trust would look to increase values through securing more leases and reducing the interest payments on its portfolio.

The value of the portfolio increased by 20 per cent, while net tangible assets a unit increased 2.4 per cent to $3.40. The trust reaffirmed operating earnings forecasts of between 29.6c and 30c a unit for 2015.

Unitholders at the AGM voted to reappoint chairman John Harkness.

Speaking after the meeting, Charter Hall joint managing director David Harrison said sharemarket volatility in the US might slow interest rate rises there, and therefore in Australia.

He said this would be positive for the retail market, with low interest rates stoking spending.

Mr Harrison added that despite the tightening yield, retail and industrial properties were still better value than office buildings. He expected yields to compress further in the office and ­industrial markets over the coming year.

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State’s mall market springs to life
BEN WILMOT THE AUSTRALIAN OCTOBER 25, 2014 12:00AM

THE tightly held Victorian shopping centre market is showing signs of greater activity with several major deals being struck and more centres in regional areas coming to market.

The Yarram Plaza is for sale and the ­Summerhill Shopping Centre is also on the market.

The Steven Sewell-led Federation Centres also struck several deals in the last quarter as it exits its syndicate business. It took full control of the Retail Direct Property 6 syndicate that held Brandon Park in Wheelers Hill, Victoria, and then sold a half stake in that centre to a superannuation fund.

The Weekend Australian understands that Telstra Super, which co-owns Carlingford Court in Sydney with Federation, is the likely partner.

Federation also picked up a half stake in Bentons Square in Mornington, with an option to acquire the remaining 50 per cent by July 2016. It sold its Somerville centre during the period. The group is selling its Warrnambool Shopping Centre via CBRE.

Now, Federation’s $55m RDP 18 is holding a meeting to allow Federation to acquire the assets in the syndicate. It owns The Gateway Shopping Village in Melbourne’s Langwarrin and the Hilton centre in South Australia.

Centres in the group’s $76m RDP 5 — Belmont Shopping Village, in Victoria, and Kurralta Central, in SA — are also to be bought by the group if syndicate investors grant their approval.

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Yield compression accelerates
BEN WILMOT THE AUSTRALIAN NOVEMBER 04, 2014 12:00AM

PROPERTY yields are tightening across the retail market as major shopping centres change hands at a more rapid pace as the sales season peaks.

Retail transactions have jumped since June, hitting $4.5 billion in 2014 for the year-to-date.

This puts volumes 8 per cent above the long-term annual average as at October.

“Investors are attracted to the stability of the retail sector,” JLL’s head of retail investments Simon Rooney said. “However, there are limited opportunities to acquire good quality centres with positive trade area fundamentals and minimal supply risk.”

Average retail yields across all shopping centre formats sharpened in the greatest quarterly shift seen since yields reached their peak in December 2009. Yields dropped from 7.69 per cent at the end of June to 7.54 per cent at the end of September, JLL Research said.

“The rate of yield compression has accelerated and it has become more broad-based across different retail formats,” Mr Rooney said.

He added that the shift resulted from investors seeking to build their portfolios, a greater appetite for risk and a more positive outlook for property fundamentals.

He said investors were willing to lower their return expectations for the sector, citing the fund recapitalisation of Lend Lease REP 3, which comprised five sub-­regional centres, in a $600m-plus deal, and the recent sale of a half-stake of North Sydney’s 101 Miller Street and retail centre, Greenwood Plaza, to TIAA Henderson Real Estate, for about $310m as key deals.

TH Real Estate also teamed up with Federation Centres to buy Brisbane’s Mt Ommaney for $416.25m on a tight yield.

JLL Research found the most pronounced compression in yields in the sub-regional sector, where they dipped by 23 basis points.