Townville acquisition adds to Fawkner Property’s Queensland retail war chest

Acquisitive Melbourne-based fund manager Fawkner Property has acquired Townsville’s Willows Shopping Centre for $212 million, adding to its high-quality Queensland retail portfolio.

Simon Rooney, CBRE’s Head of Retail Capital Markets – Pacific, acted on behalf of Fawkner Property to negotiate the transaction with Dexus Wholesale Property Fund (DWPF). Stonebridge and JLL acted for Dexus.

The Townsville transaction boosts Fawkner’s total funds under management to over $3 billion, with additional retail assets in the pipeline. It follows a national retail buying spree, which has included Queensland acquisitions in Gladstone, Mackay and Cairns.

Fawkner Property founder Chris Garnaut noted, “This is a strategic acquisition, which extends our foothold in central and Far North Queensland and will allow us to capitalise on the synergies of owning a high-quality retail portfolio in a fast-growing market.”

“As interest rates potentially move into a stabilisation phase, private capital, which has dominated this investor space over the past two years, is moving quickly to secure high quality, large retail assets at compelling returns as this window of opportunity begins to close,” Mr Rooney said.

“We have recently seen the re-entry of offshore and now domestic institutional investors into the sub regional and regional shopping centre sector given the compelling returns on offer. This should translate into increased retail sale volumes as we close out 2024 and continue into 2025.”

Fawkner has been one of Australia’s most active acquirers of regional and sub regional shopping centres in recent years.

Since 2021, Fawkner has purchased 11 retail assets totaling $2.1 billion, including Western Australia’s Midland Gate, Karratha City and The Square Mirrabooka; Stockland Traralgon in Victoria; Queensland’s Cairns Central, Mount Pleasant Centre, Stockland Cairns, and Stockland Gladstone; as well as New South Wales centres Settlement City in Port Macquarie and Stockland Nowra.

Willows Shopping Centre boasts a gross lettable area (GLA) of 44,507sqm positioned on a high profile 15.39-hectare site together with an additional development land parcel of 4.42-hectares.

The centre is home to Townsville’s first Aldi and is the only triple supermarket anchored shopping centre, benefitting from significant capital expenditure and development program. This has included the Woolworths and fresh food upgrade and the successful leasing reconfiguration of the ex-Target box which introduced Aldi, TK Maxx, and Planet Fitness.

Willows Shopping Centre is located 11km south-east of the CBD and performs exceptionally well with turnover of circa $360 million (including Aldi estimates), ranked number 1 for total turnover in Northern Queensland (SCN – Little Guns 2023).

Anchored by strongly performing major tenants Big W, Woolworths, Coles, and Aldi which combine for circa 54% of total centre MAT – the centre is underpinned and securely leased to ASX-listed, national and chain retailers, comprising 93% of total tenanted GLA and 85% of gross rental income.

Townsville is the largest city in northern Australia and is key region in driving economic development, underpinned by a large industrial sector, national defence hub, large port destination and a rapidly growing tourism sector. The city is set to benefit from an expansive current trade area of 233,839 residents, which is forecast to grow by 1.2% through to 2041.