Perron Group sell stake in Runaway Bay Centre

The Perron Group have sold a half stake in Runaway Bay Centre for $128m in a deal with Greenpool Capital and Qualitas.

Runaway Bay Centre is a single level Regional shopping centre located approximately 11 kilometres north of Surfers Paradise on the Gold Coast. The Centre, managed and co-owner by Vicinity comprises Coles, Woolworths, Big W, Target and Aldi, three mini-majors, 92 specialties, 15 non retail & 15 other retail tenancies with a total NLA of 43,000sqm. The centre generates around 4.4million customer visitations per annum spending upwards of $272.6m pa.

Based on a June 2021 valuation, Vicinity hold their 50% interest for $107m with a 6.25% cap rate. Reports indicate that the deal with Qualitas & Greenpool was also priced at 6.25%, suggesting that Vicinity’s provisions for COVID impacts or vacancies may be overstated.

CBRE’s Simon Rooney facilitated sale campaign on behalf of the Perron group.

Mark Fischer, Qualitas co-founder and global head of real estate said, “We continue to see relative value opportunities in convenience-based retail centres, as the well-flagged structural and cyclical resetting of rents interplays with yields available on these assets compared to those in other defensive sectors.”

“Runaway Bay Shopping Centre is a dominant centre within its catchment, tenanted by high-performing, non-discretionary and national chain covenants, located within a strong growth catchment, with a significant underlying land holding with potential for future value add development.”

According to Vicinity’s reports, 50% of the Centre (by income) has a lease expiring in the next 12 months, providing the opportunity to remix the centre and reset rents for the next cycle.

The transaction is the latest in a number of deal in the sub-regional shopping centre market. Early today, Elanor Investors announced the acquisition of Warrawong Plaza for $136m, and the Fawkner Property Group acquired the Mount Pleasant Shopping Centre for $162m and in August, Sim Lian Metro Capital paid $133m for Cherrybrook Village Shopping Centre in Sydney,

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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