Haben Property Group are raising capital to support the acquisition of two Centres from Stockland worth $265m.
Stockland has entered agreements to sell The Pines shopping centre in Victoria and Caloundra shopping centre at an -8.5% discount to the June 2019 valuations.
The Pines Centre consists of a Coles, ALDI, Woolworths, Kmart and more than 90 specialty stores over 24,944sqm. This property is located in one of Melbourne’s strongest socio-economic trade areas. Haben will acquire the property for $180m, reflecting a cap rate of 7.8%. Stockland are reported to be providing a $5m rental support package to help support the Centre’s income as it recovers from the COVID pandemic impacts.
The Caloundra shopping centre sits in a strong population growth corridor of the Sunshine Coast and offers a Coles, Kmart and more than 45 specialty stores over 17,399sqm. Haben will acquire the Centre for approx $97m reflecting an 8.0% yield. Haben will also acquire an adjoining residential complex for $8m. Again, Stockland are reported to be providing a $3 million rent guarantee package to support the Centre’s income, despite the fact that Queensland hasn’t been affected by COVID to the same degree as Melbourne.
The Caloundra Centre was reported in May 2019 to be under contract to Charter Hall Retail REIT for $105m, however this sale did not proceed.
The two deals follow Haben’s acquisition of 3 other Stockland Centres in 2018/19; Stockland Wallsend for $81m, Stockland Cleveland Shopping Centre for $103m, and Stockland Jesmond for $118m. Haben also own Seven Hills Plaza, Croydon Central, and Station Plaza.
Haben typically acquire under performing assets with value add potential. The Group have previously traded Woodcroft Village in Sydney which they acquired in July 2013 for $22.6m and sold in 2017 for $43.8m, producing an IRR of 29%. The Group was able to secure a new long- term lease to a national tenant and facilitated major works to improve the centre. Haben Property Fund also traded out of Illawong Village in September 2017 after improving the tenancy mix and preparing a residential development scheme for 150 apartments.
The trades don’t bode well for Stockland, whose portfolio will continue to suffer valuation downgrades as the market comes to gripes with the long term impacts from COVID on rental income and on softer capitalisation rates. The expectations are that valuations will ultimately fall by up to -30%.
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