- The acquisition of Menai Marketplace and Southland Boulevard represents the largest sub-regional portfolio transaction in Australia since 2018
- More than $775 million of sub-regional shopping centres have been transacted this year
- Sale was facilitated by JLL and CBRE
HMC Capital has today announced the acquisition of two shopping centres from Lendlease’s Sub-Regional Retail Fund (LLSRF) in deals totalling $242.5 million.
The first is the acquisition of Southland Boulevard in Perth for $92.5 million and Menai Marketplace in Sydney for $150 million, which represents Australia’s largest sub-regional retail portfolio transaction since 2018.
The assets received extensive investor interest and reflect the more than $775 million worth of sub-regional shopping centres transacted this year.
Menai Marketplace is a dominant and established centre located with a densely populated affluent area, with the catchment totalling some 164,000 people. 30 kilometres southwest of the Sydney CBD, it is the only sub-regional centre within its trade area, enjoying limited competition.
Southlands Boulevard is located 12 kilometres south of the Perth CBD. It has a strong local convenience offer and is the largest centre in its trade area of over 84,000 people. Notably, the centre will become one of only 10 triple supermarket anchored centres in Australia with no discount department stores when ALDI opens next year.
Down on 2021 retail sales
Nick Willis and Sam Hatcher of JLL and Simon Rooney and James Douglas of CBRE exclusively sold the portfolio on behalf of Lendlease SRF.
“Overall transaction volumes year to date are significantly down on the record 2021 volumes that reached over $13 billion,” said Mr Willis.
“With the sale of Caneland Central announced today, and both these assets, total volumes are expected to reach $6 billion showing over a 50% decline in transactions. However, the Sub-Regional sector has attracted the greatest weight of capital.
“This demand for the sub-sector has been evidenced by the sheer transaction volumes totalling 14 sub-regional transacting totalling approx. $1.64 billion and 5% above the 5-year average.”
Mr Hatcher added, “The sub-regional investment market emerged post covid as the powerhouse sub-sector of the retail investment market – the land rich nature of these centres, diverse income profiles and dominance within their trade areas continue to attract a deep and diverse buyer pool.”
Mr Rooney added, “A combination of investor focus shifting to convenience retail and the high-profile nature of the portfolio, generated significant enquiry, genuine buyer interest and competitive bidding, with HMC Capital’s acquisition set to instil further confidence in Australia’s retail investment sector.
“Despite the increased cost of debt following the RBA’s tightening of monetary policy, retail spending has remained resilient at 17.9% growth to September 2022, while capital remains robust for quality, strong performing, non-discretionary focused shopping centres.”
