Primewest have been reported as the buyer for QIC’s Robina Home + Life homemaker centre on the Gold Coast in a $66 million completed this week.
The 14,782sqm large-format retail centres was placed on the market by QIC via a formal Expressions of Interest sale process jointly managed by Peter Tyson, Jon Tyson and Steve Lerche of Savills Australia, with Jacob Swan, Sam Hatcher and Nick Willis of JLL.
The property was developed in 2017 and contains 13 Large Format Retail Tenancies anchored by Nick Scali and The Good Guys. The 3.6ha site also accommodates 315 car parking spaces.
The property is reported to be able to generate a fully leased net income of $3.9m, reflecting a yield of 6%.
The acquisition of the Robina Home + Life complex will seed the new Primewest Large Format Retail Trust No.2.
With $4.9 billion in assets under management, Primewest Group is a significant owner in the LFR sector, with over 18 Large Format assets under management totalling over 300,000sq m and another centre under development.
Primewest Executive Chairman John Bond said “The company remained very confident in the LFR sector and saw a clear opportunity for growth at Robina Home + Life.”
“Robina Home + Life is at the epicentre of the rapidly expanding Robina community which will benefit from more than $17 billion worth of planned investment in the immediate Gold Coast vicinity,” Mr Bond said.
“The centre will anchor our second LFR Trust with its excellent profile and trading history as well as blue chip tenants in place to provide significant capital growth as well as strong returns.”
Mr Bond said the large format retail sector was particularly appealing as it shown significant growth during COVID-19 and continued to benefit from the strong national residential market.
Primewest will draw on its tenant relationships and experience across its $1 billion large format retail portfolio $1 billion to enhance Home + Life Robina’s existing offering and expand the existing tenant mix.
Savills Peter Tyson explained “Robina Home + Life is a high quality asset which attracted enormous interest from the market with the sale process generating purchase offers from 16 separate groups.
“The campaign demonstrated significant investor demand for the large format retail sector, which is being driven by a combination of macro factors, including strong market demand for quality income streams, low cost of debt and the uplift in trading performance across the home improvements sector.”
He went on to say that a significant driver has been monetary policy adjustments which saw the RBA move to cut interest rates at three intervals through the year by 65bps to the lowest level in Australian history, setting the cash rate at 0.10% in November, with recent forecasts indicating the cash rate is likely to remain on hold until 2024 or longer.
“The combination of social distancing and wider travel restrictions coupled with the low cost of debt has driven an uplift in household spending in the home improvements sector,” he continued.
Joint selling agent Jacob Swan of JLL commented “Robina Home + Life provided investors the opportunity to acquire a near new building with a strong line up of national tenants, located in a dynamic retail precinct with a large trade area of over 580,000 people. The centre is regarded as one of the premium large format retail destinations in the wider Gold Coast market.”
The Robina Home + Life complex is situated at 550 Christine Avenue, in the Robina Town Centre precinct and adjoins Bunnings Warehouse, also divested by QIC in December 2020 for $28.05 million.
Our Views
Primewest are well positioned to acquire assets of this nature for a spin off into an unlisted trust vehicle.
In January, the Group raised $55m of additional capital to help support the establishment of new funds, such as the Primewest Large Format Retail Trust No.2 and the Primewest Property Income Fund.
The Large Format Retail Trust is currently open for investment and is targeting a cash distribution of 6.5% over the 5 year investment period.
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