Weekly Transaction Update – 21st September

20 September 2018

This week we recorded 19 major transactions worth close to $977M. The largest deal we found was the sale of 50% of 1 Aviation Rd, Hoxton Park. This asset is held in a partnership between Mirvac and JP Morgan, however this week a transfer was registered at $170.5M (equal to Mirvac’s current reported book value for 50%). Whilst unconfirmed we suspect this is related to either the transfer of the assets from Aviva Investors to JP Morgan following the deal that was announced back in late 2014 or a subsequent move of the asset within JP Morgan to a new client. Mirvac’s valuation was reportedly based on a 5.2% cap rate. The 138,607sqm facility sits on 30ha of land with Woolworths and DB Schenker as major tenants. Also this week, Dexus was reported to be acquiring sites for a future office development in Melbourne snaffling up 52 & 60 Collins Streets. The RBA building at 60 Collins Street is a 13,817sqm B Grade asset which was acquired for $160M, whilst the older small building at 52 Collins Street was reportedly acquired for $70M. The combined sites will provide a 2,000sqm land parcel upon which a 35,000sqm office tower could be built. Also this week Altis Property Group have sold two homemaker Centres for $282.4M. The Valley Homemaker Centre in Fortitude Valley sold to Arkadia Group for $170M on a 7.3% yield. The Centre comprises 38,284sqm of retail space on a 29,700sqm site spanning both sides of Wickham Street. The Valley Homemaker Centre will be Arkadia largest Large Format Centre alongside the Alexandria Homemaker Centre and the nearby Harvey Norman Clearance Centre. The second centre sold by Altis, Homemaker Greenway, in Wetherill Park was acquired by Aventus Property Group for $112.4M on a 7.6% yield. This Centre sits on a much larger 63,900sqm site. Aventus have acquired 7 Large Format Centres over the past 2 years, investing over $745M in capital into the Sector. Their previous acquisition was the Castle Hill and Marsden Park Centres, acquired on a very tight yield of 5.5%. RESourceData shows that the average metro Bulky Goods asset over the past 2 years traded at a yield of 6.5%. However recent deals this quarter show a softening in yields to 7.7% . The next few transactions will test this point further with AMP Capital attempting to sell the Crossroads Homemaker Centre for around $140M on an expected full leased yield of 6.8%, and GPT’s selling Highpoint Homemaker Centre expecting $80M on a yield of 6.25%. Scroll through the list below or head to ReSourceData for further details. * indicates unconfirmed price or apportionment of a portfolio sale #ReDataSource