Listed fund manager Home Consortium’s Daily Needs REIT (ASX: HDN) has acquired the newly completed Armstrong Creek Shopping Centre from national commercial and residential developer, Wel.Co for $55.6 million.
Located just 7km south of the Geelong CBD, the centre opened in September last year and is anchored by a strong performing Coles supermarket, mini-majors and a selection of high quality national and non-discretionary speciality retailers.
The centre sits within Wel.Co’s Armstrong Creek Town Centre, the largest privately owned town centre in Australia with an end value of $1 billion and is located in the Victorian suburb of Armstrong Creek, one of Australia’s fastest growing suburbs with 11.6% population growth per annum forecast over the next five years.
Andrew Welsh, Founder and Managing Director of Wel. Co, noted the centre sold unconditionally with settlement at the end of the month.
“The sale to HomeCo. – one of Australia’s largest fund managers – is a clear advocation to the Armstrong Creek region and highlights the high quality and calibre of the Armstrong Creek Town Centre development,” Welsh said.
“Armstrong Creek Town Centre already plays an instrumental role as the retail and commercial epicentre for the Geelong growth corridor. With the accelerated growth of the Armstrong Creek area through the past 12 months, we are bringing forward our delivery timeframes for the future stages and are currently rolling out the master planned strategy that we have collaborated with Geelong City Council on over the past five years.”
The centre adjoins the future Armstrong Creek Train Station, which the state government announced as part of its $160 million commitment to expand the trainline to accommodate the booming population growth, providing direct access to Geelong and the Melbourne CBD.
The sale of the Armstrong Creek Shopping Centre to HomeCo. was brokered by Colliers’ Directors of Retail Investment Services, Tim McIntosh and Mike Crittenden.
“Regional Victorian retail investments secured by ASX-listed covenants are one of the most highly sought-after commercial investments by both institutional and private investors currently,” said McIntosh. “The investor focus is driven by confidence and security in the undoubted covenants, significant regional stamp duty concessions and recent outperformance of regional growth areas compared to metropolitan Melbourne.”
The sale of Armstrong Creek Shopping Centre is the third neighbourhood shopping centre to transact in the Geelong area in just two months and has been sold on a core cap rate of 6% with a rental guarantee for 12 months.
HomeCo. Daily Needs REIT Portfolio Fund Manager, Paul Doherty, said Armstrong Creek Shopping Centre was the only Coles supermarket in the primary trade area with a new 15-year lease to 2035.
“The centre’s strategic location provides exposure to the high population growth corridor of the Geelong region and forms an integral part of the rapidly evolving Armstrong Creek Town Centre,” he said.
“The innovation and strategy for Armstrong Creek Town Centre, under Andrew’s leadership over the past five years, is something HomeCo. is excited to be a part of and the company looks forward to helping accelerate the development and performance of the wider town centre,” said Doherty.
HomeCo. Daily Needs REIT (HDN) also recently announced the acquisition of seven large format retail assets for $266.4 million.