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- Melbourne-based fund manager Fawkner Property has paid $162.5 million for the Mount Pleasant Centre in Queensland
- The sale price reflects a net passing yield of 6.46 per cent and a fully leased yield of 6.55 per cent
- The sale follows an active first half for retail transactions, with CBRE noting the total value of Australian retail transactions increased by 82 per cent
- The centre has an 8.4-year principal tenant weighted average lease expiry, with the major tenants including Coles, Woolworths and Kmart
Melbourne-based fund manager Fawkner Property has paid $162.5 million for the Mount Pleasant Centre in North Queensland, amid strong investor interest for sub-regional shopping centres.
The centre reportedly drew significant buyer interest, with the sale price reflecting a net passing yield of 6.46 per cent and a fully leased yield of 6.55 per cent.
The sale comes after an active first half for retail transactions, with CBRE’s Q2 MarketView highlighting that the total value of Australian retail transactions increased by 82 per cent to $2 billion between Q1 and Q2, 2021.
On a year-on-year basis, the increase is even more pronounced, given that Q2 2020 was heavily impacted by COVID restrictions, according to CBRE.
The sub-regional sector was particularly busy the report found, with almost $1.3 billion in assets exchanged in the second quarter of this year – nearly double what was transacted the same time last year and 16 per cent more than in the second quarter of 2019.
Notable recent transactions include the Perron Group’s sale of Mirrabooka Square in Western Australia to Fawkner for $195 million and APPF’s sale of CS Square in Victoria to the DeLutis Family for $136.5 million.
Other transactions in the sub-regional market include Makris Group’s sale of Hallett Cove Shopping Centre in South Australia to Antunes Group for $71 million and MA Financial’s acquisition of Stockland Bundaberg in Queensland for $140 million.
CBRE’s Simon Rooney and James Douglas negotiated the sale of Vicinity Centres’ Mackay asset on behalf of a mandate client.
“With neighbourhood and freestanding retail assets selling at record pricing levels, investors are shifting their focus to high quality sub-regional shopping centres, oriented towards non-discretionary spending,” Mr Rooney said.
“This market segment has performed well during the dislocation caused by the pandemic, demonstrating net operating income stability and transparent income growth.”
The 22,519sqm Mount Pleasant Centre is the main convenience-based retail complex in its trade area, as well as the sole sub-regional centre serving a catchment of 112,520 people.
It has an 8.4-year principal tenant weighted average lease expiry, with the major tenants including Coles, Woolworths and Kmart.
“Mount Pleasant Centre was one of the strongest performing regionally located, sub-regional shopping centres to be offered to the market in Australia in many years,” Mr Rooney said.
