A highly sought-after neighbourhood retail portfolio comprising five assets across Queensland, Adelaide and Perth has been bought by SCA Property Group for $180 million.
The portfolio consists of Brassall Shopping Centre, QLD ($46.5m); Port Village, QLD ($36m); Dernancourt Shopping Centre, SA ($46m); Tyne Square, WA ($12m) and Fairview Green, SA ($39.5m). With these five new properties, SCA Property Group will own and manage more than $4.6 billion of convenience-based shopping centres.
JLL’s Sam Hatcher, Jacob Swan, Nick Willis and Ben Parkinson sold the portfolio on behalf of Centuria Capital Group subsidiary, Primewest, via an international Expressions-of-Interest campaign.
Jason Huljich, Centuria Joint CEO, said, “These daily needs retail neighbourhood shopping centres have proved resilient throughout the past few years as local communities continued to rely on the supermarket anchored centres for their non-discretionary shopping. Both funds have been held for long-term periods and the sales provide compelling returns for our investors.”
The geographically diversified portfolio offered immediate scale in the highly fragmented convenience retail sector and a secure income stream, with nearly 90% of income underpinned by non-discretionary uses.
JLL’s Joint Head of Retail Investments (Australia), Sam Hatcher said, “The assets were strongly sought on a portfolio and individual basis with 21 offers received, reinforcing the pent-up demand from varying capital types to own neighbourhood centres.
“Neighbourhood centre investment activity in 2022 continues to be strong, with 22 assets trading within the first half of the year, totalling $900 million. The non-discretionary retail sector is proving to be the most resilient across all sectors and we expect capital to continue to increase their allocations to this highly defensive sector.
“With construction costs at elevated levels for the foreseeable future, existing and strongly performing neighbourhood centres will continue to attract a premium with constrained supply,” said Hatcher.
The sale of the portfolio reflects the largest neighbourhood portfolio transaction since the Fort Street re-capitalisation and sale of the Lederer Portfolio. Both transactions were brokered by JLL.
SCA Property Group expects to add value to the acquisition portfolio through its active asset management and leasing capabilities.
The acquisitions will be debt funded utilising existing undrawn bank facilities and are expected to settle in early July 2022.