YFG Shopping Centres, has taken over the remaining three-quarter stake in Brisbane’s Mt Ommaney Shopping Centre from global fund manager Nuveen in a $285 million deal.
Mt Ommaney Centre is a single level Regional shopping centre located approximately 16 kilometres south-west of the Brisbane CBD. It is anchored by Big W, Kmart, Target, ALDI, Coles and Woolworths and includes more than 154 specialty stores with a total NLA of 56,469sqm. The Centre sits on a 19.3ha site with parking for over 2,600 cars.
YFG Shopping Centres is a family business which controls 20 shopping centres in south-east Queensland, including Australia Fair on the Gold Coast and Brookside Shopping Centre in Brisbane’s north. YFG bought its initial 25 per cent stake from Vicinity Centres in late 2019 for $94.5 million.
The deal with Nuveen was reported to have been based on a core cap rate of 6.25%.
Mount Ommaney was Nuveen's first foray into retail property in Australia, acquiring their 75% interest from AMP Capital for $312M in 2014. Nuveen Real Estate (formerly TIAA Henderson Real Estate’s) is one of the largest investment managers in the world, with AUD $180 billion of assets under management globally.
Nick Evans, Nuveen Real Estate Head of Asia Pacific said: “The exit price reflects a premium to book value and is an excellent outcome for our client. The investment has delivered a positive net IRR over the hold period and the disposal further illustrates our growing track record and skillsets in this highly sophisticated market in spite of ongoing headwinds for the sector.”
Whilst the sale was in excess of the Groups book value, and produced a positive total return, Nuveen suffered a minor capital loss of from the investment which is a reflection of the deterioration that the retail market has suffered over the past 6 years, amid reducing consumer expenditure, increased competition, the take up of on-line retail and more recently the impacts from COVID19.
Whilst the Centre has a development approval for an 11,481sqm expansion, including the introduction of a state-of-the-art cinema, casual dining precinct and entertainment destination, the circumstances have clearly moved against the expansion.
Nuveen appointed CBRE to manage the sale of the asset.
“Strategic, off-market transactions such as this, reinforce the ability for retail owners to secure competitive pricing outcomes in the current market,” said Simon Rooney, CBRE’s Head of Retail Capital Markets – Pacific.
“We expect this trend to continue, as investors seek out high-quality, rarely traded retail opportunities offering attractive return parameters.”
Nuveen Real Estate’s other retail assets in Australia include a half stake in the Greenwood Plaza in North Sydney and a 33 per cent stake in Myer Bourke Street, Melbourne.
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