- The development is the third joint venture between MaxCap and Troon
- Chrinside Lifestyle Centre was 100% pre-leased at completion of construction
- Site was acquired when Kaufland exited the Australian market
Joint venture partners MaxCap Group and Troon Group today confirmed the Chirnside Lifestyle Centre development was acquired by IOOF Investment Services for its AM Property Plus trust, part of the Direct Property Portfolio managed by MLC Asset Management, the investment division of Insignia Financial Group (ASX: IFL), for over $50 million on a 5.25% capitalisation rate in a deal secured by Colliers and Stonebridge.
Located 32 kilometres northeast of Melbourne’s CBD and spanning 11,100 square metres of gross lettable area, the large format retail centre project comprises 286 on-grade car bays, was 100% pre-leased at the completion of construction in December 2022, and saw the divestment of two pad sites directly to McDonald’s and KFC as part of the project.
Chirnside Lifestyle Centre boasts a tenant profile dominated by national brands, including Harris Scarfe, Baby Bunting, Fantastic Furniture, and Super Cheap Auto.
The 3.5 hectare site is well positioned on the busy Maroondah Highway and underpinned by a prime Commercial 1 land zoning, making it a very attractive long term land holding opportunity.
Former Kaufland site developed
When the German supermarket group left the Australian market in 2020, it sold off its portfolio of nine retail land holdings in the country.
According to Stonebridge, in less than two years, the fourth site has been redeveloped into a prime asset and was then offered to market for sale amid strong expectations.
In September 2022 Stonebridge noted on its website that the expressions of interest campaign expected to attract interest in the mid $40 million range.
Stonebridge also noted that the tenancy mix is 86% weighted to national and chain tenants, and included a weighted average lease expiry (WALE) of 7.7 years by income.
“We identified the site in 2020 as part of the Kaufland supermarket portfolio just as the pandemic had put us all into lockdown. We had a strong conviction about the quality of the site and the opportunity,” said Troon managing director Tom McInerney.
“The site occupies a prominent elevated position on Maroondah Highway in an established retail precinct with 38,000 cars passing daily. Through our existing relationships with the major retailers, we were able to quickly secure a mix of tenants that complement the precinct and de-risk the project with MaxCap.”
A great outcome for JV partners
Chirnside Lifestyle Centre is the third joint venture between MaxCap and Troon, said MaxCap head of direct investment, Simon Hulett.
“This project continues to build on our long track record of success together,” said Hulett.
“The development represents a highly defensive retail investment backed by long leases to national tenants with strong covenants. We’re delighted it has been acquired after a highly competitive sales campaign and are pleased to deliver further amenity into the community.”
The sale was managed by Colliers, Tim McIntosh, James Wilson, and Mike Crittenden in conjunction with Stonebridge Property Groups’ Justin Dowers, Kevin Tong and Phillip Gartland and received a high volume of interest from private, offshore and syndicate investors.
“The benchmark result reinforces the depth of buyer demand we continue to experience for bulletproof retail investments. Chirnside Lifestyle Centre offers all the key investor ingredients, with a core metropolitan Melbourne location, significant weighting to national retailers on long leases, attractive rental growth and backed by underlying land value,” said McIntosh.
“The limited supply of high-quality metropolitan shopping centres has seen a growing theme of increased interstate and offshore purchaser activity. The successful sale represents our second LFR transaction with the AM Property Plus trust and its first retail investment in Victoria.”
