Mirrabooka Square Sells on 6.97% yield

22 June 2021

The Perron Group have sold The Square Mirrabooka for $195m, reflecting a 6.97% yield and affirming a market yield for the seldom traded Sub Regional Mall market.

The centre is located on Yirrigan Drive, approximately 10km north of the Perth CBD and adjacent to the Mirrabooka Town Centre.

The Square Mirrabooka, which originally opened in 1979, is a classic sub regional centre with 42,799 sqm of retail space, anchored by 3 supermarkets (Coles, Woolworths, Aldi) and 2 discount department stores (Kmart and Big W). The Centre also has over 86 specialty stores and seven mini majors. The Centre sits on a 13.6ha site and is spread out across a single level with convenient parking facilities for 2,167cars on 3 sides of the Centre.

The Perron Group acquired the Centre in 1989 and have continued to improve the Centre via a number expansions and redevelopments. The last refurbishment was in 2019 with the creation of the a new Fresh Food Precinct alongside Woolworths.

The Centre is to be acquired by the Fawkner Property Group’s latest trust, Essential Services Trust No. 18, which contains six smaller fuel and convenience retail outlets. The trust is reported to offers investors a 7% annual yield, paid monthly. As part of the deal, Fawkner also acquired the adjacent Mirrabooka Plaza, a free-standing medical centre which is fully leased to a subsidiary of ASX-listed Sonic Healthcare.

The acquisition was struck on a passing yield of 6.97% and a fully leased yield of about 7.25%.

The off-market transaction was brokered by Colliers’ Lachlan MacGillivray and follows a number of other recent transactions in the Sub regional space. Last week AMP Capital announced the sale of the Marketown Centre in Newcastle for $150.5m to SCA Property Group on a 6% yield and in April 2021 Blackstone sold Clifford Gardens Shopping Centre to Elanor for $145m on a 7.3% yield.

Sub regional Centres are generally trading on yields that are over 100Bps softer than their Neighbourhood Centre counterparts largely reflecting the higher risks that the larger Centres currently face. The Centres tend to have a much higher proportion of discretionary retailers which are more easily impact by changes in consumer behaviour. More recently the move to more on-line transactions for goods and services has seen a number of traditional businesses close their physical stores. Adding to this is the risk that the Woolworths or Coles decide to close the discount department stores that these Centres have relied upon for decades. There are few alternative uses for large floor spaces in Centre which often already contain the major Supermarkets.

Perron Group

The Perron Group have a number of other major shopping centre interests including;

  • Belmont Forum – With approximately 47,772 m² of GLA, Belmont Forum is anchored by Coles, Woolworths, Big W, Kmart and Aldi. The shopping centre forms a major part of the Belmont Town Centre, which also includes a Reading Cinema Complex, a tavern and sundry commercial developments. Belmont Town Centre is located in the suburb of Cloverdale, approximately 6km east of the Perth CBD.
  • Cockburn Gateway Shopping Centre – Supported by a tavern, Bulky Goods and commercial development, the total precinct comprises approximately 76,914 m² of GLA and is anchored by Coles, Woolworths, Target, Big W and Aldi. Cockburn Gateway is located approximately 13km south east of Fremantle and 23km south of the Perth CBD
  • a 50% interest in ;
    • The Broadway, Sydney – with approximately 52,708m² of GLA and anchored by Coles, Kmart, Target, Hoyts, Aldi, Apple, H&M and Sephora. The centre is situated 2.5km south-west of the Sydney CBD in the suburb of Glebe. With proximity to the University of Technology Sydney and University of Sydney, Broadway services a large student population as well as the emerging catchment of Sydney’s inner-west.
    • Colonades Centre – with GLA of approximately 81,946 m², the centre is anchored by Coles, Woolworths, Kmart, Big W, Harris Scarfe and Aldi, and is also supported by two freestanding commercial buildings. Colonnades forms a key component of the Noarlunga Town Centre and is located approximately 30km south of the Adelaide CBD.
    • The Galleria – With approximately 83,789 m² of GLA, the centre is anchored by Myer, Coles, Woolworths, Kmart, Target, Aldi and Greater Union. Located approximately 7.5km from the Perth CBD in the suburb of Morley, Galleria is the largest shopping centre in the north-eastern suburbs.
    • Rhodes Waterside – with a total GLA of approximately 34,781 m² (including a small office component), the centre is anchored by Coles, Target, Aldi, Bing Lee and Reading Cinemas. Rhodes is unique in that it is also anchored by one of three IKEA stores which currently service the Sydney metropolitan region. Located on Rider Boulevard in Rhodes, the centre is situated in Sydney’s inner west 17km west of the CBD
    • Runaway Bay – With a total GLA of approximately 42,997 m² and 2,160 car parking spaces, the centre is anchored by Coles, Woolworths, Big W, Target and Aldi. Runaway Bay Shopping Village occupies a landmark town centre site in the heart of Runaway Bay, located approximately 12km north of the Gold Coast CBD
    • The Glen – approximately 18km south-east of the Melbourne CBD and will comprise a total GLA of approximately 78,606 m² on completion of current redevelopment.
    • Westfield Geelong – With a total GLA of approximately 51,587 m², the centre is anchored by Myer, Target, Big W and Coles and is the major shopping centre for the greater Geelong area. The property was originally developed by Perron Group and constructed between 1985 and 1988.
    • Westfield Airport West – With approximately 52,266 m² of GLA, the centre is anchored by Coles, Woolworths, Target, Kmart, Aldi and Harris Scarfe.
    • Westfield Burwood – With a total GLA of approximately 63,219m², the centre is anchored by David Jones, Kmart, Target, Coles, Woolworths and Event Cinemas.
    • Westfield Woden – With a total GLA of approximately 71,947 m², the centre is anchored by Myer, Coles, Woolworths, Big W and Hoyts Cinemas.

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