MaxCap and Troon sell Chirnside Lifestyle Centre to IOOF Investment Services Ltd

Joint venture partners MaxCap Group and Troon Group have confirmed their recently completed development, the Chirnside Lifestyle Centre, has been acquired by IOOF Investment Services Ltd for its AM Property Plus trust, part of the Direct Property Portfolio managed by MLC Asset Management, the investment division of Insignia Financial Group (ASX:IFL), for over $50 million on a 5.25% capitalisation rate in a deal secured by Colliers and Stonebridge.

The 11,100sqm gross lettable area large format retail (LFR) project, comprising 286 on- grade car bays, was 100% pre-leased at the completion of construction in December 2022. The joint venture also divested two pad sites directly to McDonald’s and KFC as part of the project.

Chirnside Lifestyle Centre is located 32km north-east of the Melbourne CBD in Chirnside Park, part of Melbourne’s thriving eastern growth corridor and the gateway to the Yarra Valley. The Centre is fully leased with a tenant profile dominated by national brands, including Harris Scarfe, Baby Bunting, Fantastic Furniture, and Super Cheap Auto. The 3.5 ha site is well positioned on the busy Maroondah Highway and underpinned by a prime Commercial 1 land zoning, making it a very attractive long term land holding opportunity.

“This is our third joint venture with Troon Group, and we couldn’t be happier with the strong partnership we have built. This project continues to build on our long track record of success together,” said Simon Hulett, Head of Direct Investment at MaxCap Group. “The development represents a highly defensive retail investment backed by long leases to national tenants with strong covenants. We’re delighted it has been acquired after a highly competitive sales campaign and are pleased to deliver further amenity into the community.”

Tom McInerney, Managing Director of Troon Group, said, “We identified the site in 2020 as part of the Kaufland supermarket portfolio just as the pandemic had put us all into lockdown. We had a strong conviction about the quality of the site and the opportunity. The site occupies a prominent elevated position on Maroondah Highway in an established retail precinct with 38,000 cars passing daily. Through our existing relationships with the major retailers, we were able to quickly secure a mix of tenants that complement the precinct and de-risk the project with MaxCap.”

Mark D’Arcy-Bean from MLC Asset Management, said Chirnside Lifestyle Centre was strategically acquired as a core addition to the business’s LFR portfolio. “Being a brand-new construction with annualised growth, Chirnside Lifestyle Centre will become a welcome addition to our LFR portfolio, given its strategic location within a rapidly growing area with opportunities for future development.”

The sale was managed by Colliers, Tim McIntosh, James Wilson, and Mike Crittenden in conjunction with Stonebridge Property Groups’ Justin Dowers, Kevin Tong and Phillip Gartland and received a high volume of interest from private, offshore and syndicate investors.

Tim McIntosh, Director of Colliers, said, “The benchmark result reinforces the depth of buyer demand we continue to experience for bulletproof retail investments. Chirnside Lifestyle Centre offers all the key investor ingredients, with a core metropolitan Melbourne location, significant weighting to national retailers on long leases, attractive rental growth and backed by underlying land value.” “The limited supply of high-quality metropolitan shopping centres has seen a growing theme of increased interstate and offshore purchaser activity. The successful sale represents our second LFR transaction with the AM Property Plus trust and its first retail investment in Victoria.”