Primewest Acquires Neighbourhood Centres

14 December 2020

Primewest has acquired Melbourne Square Shopping Centre and two Neighbourhood Centres in WA as the group continues to expand its investor base.

The Melbourne asset will sit in a recently launched Australian Daily needs / neighbourhood retail property trust for a new institutional mandate.

The Centre, forms part of a master planned mixed-use project, positioned on the high profile corner of Kavanagh and Power Streets, in Melbourne’s Southbank, and is anchored by a two-level Woolworths supermarket, the first two-level major supermarket in Victoria.

The property has been acquired by the fund $70,000,000 in an off-market transaction negotiated by JLL’s Stuart Taylor. The Vendors, Yarra Park City Pty Ltd, is the joint venture partnership of Malaysia’s OSK Group and EPF (Employees Provident Fund).

Construction of Melbourne Square Shopping Centre is almost complete, with Woolworths set to open on the 10th December 2020. The centre is also comprises a BWS liquor store, 5 specialty stores, a childcare centre and over 120 car spaces on title.

The asset provided a new 15-year lease to Woolworths, a 20-year lease to Think Childcare and an asset WALE of 13.87 years (by income). The transaction reflects an equivalent yield of 4.73%.

Primewest is also purchasing two Perth shopping centres from Vicinity for a new wholesale trust currently being raised.

The proposed wholesale trust will acquire Dianella Plaza for $63 million, reflecting a cap rate of 7.5% and Victoria Park Central south-east of Perth for $25.3m, reflecting a cap rate of 6.25%.

Dianella Plaza is located at 366 Grand Promenade, about seven kilometres north of the city. The Centre contains 17,239 square metres of retail space anchored by Coles, Woolworths and The Reject Shop and approx 50 specialty stores, surrounded by 922 car parks.

Victoria Park Central is located at 366 Albany Highway about 5.5 kms south east of Perth and sits on a 1.3ha site. The 5,825sqm Centre is anchored by Woolworths with 26 specialty stores.

Both shopping centres have a short Weighted Average Lease Expiry – two years at Dianella, and 3.1 for Victoria Park. Primewest intends to renovate both Centres and to extend the terms of the supermarket tenancies. The Dianella Centre also has additional land which could accommodate a large format retail investment and retirement village amongst other social infrastructure.