The HomeCo Daily Needs REIT has agreed terms to acquire the Town Centre, Victoria Point in Queensland for $160m, representing a 4.75% yield.
The Centre comprises a mix of large format retailers and a neighbourhood convenience centre spread out over a 7.6ha site in Victoria Point, 27km south east of the Brisbane CBD. Strategically positioned on the corner of Colburn Avenue and Cleveland Redland Bay Road the centre service a main trade area population of 79,970, which is forecast to grow by 1.7% per annum over the next decade (above the QLD average).
Anchored by Woolworths, Bunnings, Dan Murphy’s, Petbarn, Supercheap Auto, Healius and Endeavour Group, the Centre provides 20,892sqm of NLA and 866 car parking space. The Centre is 98% occupied and a fixed WARR of 3.44% and a 7.1year WALE.
The property was developed by the Lancini Property Group and offered for sale via JLLs Nick Willis and Sam Hatcher.
Nick Willis Said “We are continuing to experience strong investor demand for assets that have demonstrated income certainty over the last 24 months and diversification in the non-discretionary and service based sectors. Large scale investment opportunities like TownCentre Victoria Point are unique to the Australian market, and provide investors an opportunity to acquire immediate scale and dominance in a local market.”
Sam Hatcher Said “Following what has been a relatively supply constrained start to 2021, the last month has seen a significant increase in transaction volumes, with our team brokering over $1billion of comparable shopping centres. This activity reinforces the growing investor confidence for larger scale retail assets in the Australian market.”
To support the purchase, the REIT is undertaken a fully underwritten institutional placement to raise $70 million at an issue price of $1.45 per unit. The REIT will also draw $102m of debt funding at settlement. The acquisition is immediately accretive to HDN’s previous FY22 FFO/unit guidance of 8.3cpu (reaffirmed on 31 May 2021).
HDN Fund Portfolio Manager Paul Doherty said: “Opportunities to acquire an asset of this quality and scale are rare, particularly one which complements our strategy and existing portfolio so strongly. This well-located flagship convenience property is anchored by high quality, strongly performing tenants on long term leases with attractive organic growth. In addition, the property offers significant long-term potential to drive enhanced returns through development by capitalising on the property’s significant expansion potential.”
Further Information
The HomeCo Daily Needs REIT is on our Top REIT Picks list. We support the thematic of investing in well located Neighbourhood Convenience assets.
The acquisition yield is extremely sharp and points to continued demand for these type of Centres.
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