Centuria Acquires $15m Margaret River Shopping Centre

Australasian real estate funds manager, Centuria Capital Group, has secured the Margaret River Shopping Centre, WA, for $15million, reflecting a 6.47% initial passing yield.

Located at 132 Bussell Highway in the heart of the Margaret River, the daily needs retail transaction was secured from a local vendor. The acquisition will underpin the Margaret River Shopping Centre Trust (MRSCT or Trust), a single-asset, closed-ended wholesale property fund, providing a forecast initial starting distribution yield of 5.75% pa.

The single-level shopping centre is anchored by a Coles Supermarket and Liquorland, which collectively lease 2,713sqm, and three complementing specialty shops, totalling 280sqm. Specialty stores include a Brumbyโ€™s bakery, Bobโ€™s Shoe Store and jeweller, Glitterati.

Approximately 81% of the shopping centreโ€™s gross income is derived from the Coles Group and this particular supermarketโ€™s Moving Annual Turnover (MAT) is 10.2% above the Urbis 2021 โ€˜Single Supermarketโ€™ benchmark.

The asset is 100% occupied and provides a 2.8-year Weighted Average Lease Expiry (WALE), enabling Centuria to draw on its strong inhouse asset management and leasing capabilities to execute value-add strategies.

The acquisition adds to Centuriaโ€™s existing $1.7billion daily needs retail platform.

Jason Huljich, Centuria Joint CEO, said, โ€œThis acquisition exemplifies how we are executing our corporate strategy to secure value-add opportunities to match specific profiles within our broad unlisted investor network. We are adopting a disciplined approach to our real estate transactions and are excited to offer this opportunity to our HNW investor base.โ€

Bruce McCully, Centuria Head of Retail added, โ€œThe Margaret River Shopping Centre adds to Centuriaโ€™s strong convenience, neighbourhood shopping retail platform. The daily needs retail sector throughout Australia continues to experience strong tailwinds, underpinned by non-discretionary spending, which makes it somewhat resilient to wider economic impacts.

โ€œIn particular, this shopping centre supports a burgeoning local community with the Australian Bureau of Statistics (ABS) showing the Margaret River region as having one of Australiaโ€™s fastest growing regional populations. The region benefitted from a robust 3.5% pa population growth between 2011 and 2021, significantly above Western Australia and Australiaโ€™s growth of 1.6%pa and 1.4%pa, respectively. These favourable metrics provide us with the confidence to execute a favourable value-add leasing strategy.โ€

The Margaret River Shopping Centre was originally constructed in 2001 by Coles Property Developments and has been maintained to a high standard. It is positioned within the heart of Margaret River Town Centre, with over 50-metre frontage to the main street. Margaret River is c.270km south of Perthโ€™s CBD.

MRSCT will provide an initial 10-year term and monthly distributions. It has a minimum entry investment of $250,000. Centuria will seek to raise $9.15million to launch the Trust. The Trust will launch in early February. Settlement is expected in late March 2023.

CBREโ€™s James Douglas and Chloe Mason, and VPG Propertyโ€™s, Craig Butler & David Walser represented the vendor.

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