Perth’s Greenpool Capital in partnership with investment firm Qualitas has made its latest retail play, acquiring a 50% stake in the Gold Coast’s Runaway Bay Shopping Centre for $128 million. The deal was struck on a fully leased yield of 6.5%.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney negotiated the off-market sale on behalf of Perron Group, in the latest indicator of strengthening buyer demand for high quality, sub-regional shopping centre investments.
“With record historical pricing being achieved for freestanding and neighbourhood centres, astute investors are shifting their focus to high quality sub regional assets,” Rooney said.
“Joint venture opportunities with major institutional owners and managers are now also being actively pursued, particularly those offering future development upside. There has been particularly strong sub regional centre investment activity in Queensland of late, including the recent sales of the Mount Pleasant Centre in Mackay to Fawkner Property and Stockland Bundaberg to MA Financial for a combined total of $302 million.”
The 42,862m2 sub-regional centre presents as one of the premier sub-regional shopping centres in South East Queensland, benefitting from a diverse tenancy mix, with a focus on convenience, lifestyle and a necessity based, service and fresh food offer.
“Runaway Bay is an established, highly productive sub-regional centre and a solid tenancy base, with major, national and chain tenants comprising 88% of the total GLA,” Rooney said.
“The centre is located on a land rich 124,700m2 site, which is under-utilised and offers significant mixed-use development opportunities going forward.”
The sale follows a recent $13 million refurbishment and reconfiguration of the fresh food precinct together with the internal and external casual dining precinct, which is due to be completed this year, to capitalise on the centre’s attractive waterfront location.
The Runaway Bay centre is anchored by a strong triple supermarket offer of Woolworths, Coles, and ALDI together with dual discount department stores in the form of Big W and Target.
Rooney noted that the key major tenants – Woolworths, Coles, and Big W – all performed well above industry benchmarks.
Specialty tenant performance is also robust, with productivity being 31% above the Urbis benchmark. Moving forward, the centre is well-positioned to benefit from significant food expenditure within the main trade area (MTA) of $901 million, accounting for 55% of retail spending.
Overall retail spending in the MTA is projected to increase from $4.1 billion to $5.5 billion by 2031, representing strong average annual growth of 2.9%, supported by an established, densely populated and growing trade area population of nearly 240,000 residents.
Close to $1 billion in additional major retail transactions are pending in South East Queensland across the sub-regional and larger regional centre categories, relating to the current sale campaigns for 50% interests in the highly regarded Harbour Town Centre on behalf of the Lendlease managed APPF and the QIC Property Fund stake in the strong performing Westfield Helensvale, in addition to a 20% interest in Pacific Fair on behalf of the Dexus managed ADPF, all expected to transact pre-Christmas.
“Investor interest in Queensland is being driven by strong retail expenditure and solid population growth in addition to robust and resilient asset performance, with Queensland’s retail sector having had a less impact from COVID lockdowns,” Rooney said.
The Runaway Bay sale follows Perron’s recent sale of a 100% stake in Mirrabooka Square in Western Australia to Fawkner Property for $195 million.
It represents the latest retail acquisition for Greenpool Capital, which was established in 2016 by Brad Osborne. Runaway Bay follows the group’s $50 million acquisition of North Adelaide Village by in 2020 from the Makris Group, which was also a joint venture with Qualitas.