Elanor Retail Sells QLD Neighbourhood for $28m

23 August 2021

The Elanor Retail Property Fund has sold Moranbah Fair, a Neighbourhood Shopping Centre 195km south-west of Mackay.

Moranbah Fair is a fully enclosed two level neighbourhood shopping centre anchored by a full-line Coles supermarket, with a Target Country mini-major plus 12 specialty shops, 3 kiosks and 6 office tenancies plus a freestanding KFC drive-through restaurant pad site. The Centre provides a total NLA of 7,052 sqm and sits on a 16,770 sqm site with parking for 195 cars.

Fund Manager, Michael Baliva, said “Since its acquisition in 2017, Moranbah Fair has contributed strong income to the Fund and has increased in value by 12%. The sale of Moranbah Fair highlights our capability in unlocking the value of ERF’s assets through the execution of active tenant re-mixing initiatives. The sale reflects the strong demand for supermarket and non-discretionary based retail assets, similar to the Fund’s other Income Assets, and supports the strategic repositioning of ERF’s Value-Add Assets.”

Elanor first listed the property for sale in May 2020 however with the national lockdown due to COVID, there was limited interest in the Centre at the time. Sentinel Property Group were reported to be in due diligence on the asset in April 2021 at a price of c.$28m.

The Centre has a net income of approximately $2.4m, providing Sentinel with an 8.5% yield on the acquisition.

Proceeds from the sale of Moranbah Fair will be used to further strengthen the Fund’s balance sheet and provide capacity to acquire further Value-Add retail investments and undertake capital management initiatives. ERF intends to initially repay $25 million of debt, reducing the Fund’s pro-forma gearing to 10.5%.

Elanor Investors Group CEO, Glenn Willis, said “ERF is a ‘Value-Add’ Retail Real Estate Fund with a focus on retail assets that provide significant potential for high risk-adjusted returns. We are pleased with the sale of Moranbah Fair, which was identified for divestment given the limited additional valueadd upside at the property. Furthermore, this transaction provides ERF with increased capacity to execute the value-add initiatives within the portfolio and undertake new investments in value-add retail assets.”