Weekly Transaction Update - 23rd November 2018
This week we recorded 28 major transactions worth $938M
Charter Hall Sells out of Newstead
Growthpoint Properties has agreed to acquire Charter Hall's Newstead office tower from for $250 million. The deal was struck on a 6.1 per cent passing initial yield.
As part of the urban renewal area of the Gasworks, the property was developed in 2014 and has an area of 24,665 square metres of space across large floor plates. The property is fully leased to ASX-listed tenants including Bank of Queensland and Collection House, with a WALE of 7.5 yrs and the first significant lease expiry not until May 2026.
Growthpoint will fund the acquisition from existing debt facilities and a $135M capital raising, with the South African Growthpoint entity committing to its full entitlement of $89M.
Charter Hall held the Skyring Terrace building in equal shares in its Prime Office Fund and its Direct Office Fund and is now shifting their focus back to the CBD where they have embarked on a buying spree in 2018, buying over $520M of commercial assets.
Fortius Takes on the Barracks
Fortius Funds Management has bought a major mixed-use complex in Brisbane, known as The Barracks, from financial services company Challenger for about $162 million on an approximately yield of 5.8%.
The asset sits between the Brisbane Roma Street rail and bus station and Suncorp Stadium in the Petrie Terrace area and is a popular ant track for spectators heading to the stadium.
Challenger acquired the asset in 2014 for about $143M and worked through a remix and re-leasing process to improve the offering with about $10M of capex. Challengers' last external valuation in June 2018 was $151.5M on a 6.25% cap rate.
The property contains a large Coles Supermarket, an Independent Cinema complex, a range of F&B operators and a significant office component.
A number of vacant tenancies have now been replaced and the property is now 90.4 per cent leased, with a weighted average lease expiry of 5.3 years.
Stockland Divests 2 Regional Assets
Stockland has sold 2 shopping centres in Bathurst and Caloundra for a combined $113.1 million at a 5% discounts to their book value, highlighting the challenges ahead for regional retail assets.
The Bathurst Centre was acquired by Moelis for approx $92M on a 7.25% yield. The 19,446sqm Centre comprises a Woolworths, Big W and 41 specialty stores. The Centre competes with the Bathurst City Shopping Centre across the road which Vicinity sold to QIC in October 2017 for approx $70M on a 6.5% yield.
The Caloundra Centre, a neighbourhood shopping centre anchored by Woolworths and five specialty stores – opposite Stockland Caloundra Shopping Centre – was acquired separately by another investment group for approx $20.7M on a 5.5% yield.
GPT Sells Highpoint Homemakers
GPT has sold the Highpoint Homemakers Centre in Maribyrnong to a private investor for $80.5M. The fully leased Homemaker Centre, opposite Melbourne’s Highpoint Shopping Centre, is anchored by a Spotlight store along with 18 other big box retailers returning net income of around $5 million a year. The sale represents a yield of approx 6.2%
GPT originally acquired the Homemaker centre in 2001 as part of the takeover of the Homemaker bulky goods portfolio, and co-owns the centre with the GPT Wholesale Shopping Centre Fund (GWSCF).
The 21,272sqm single-level homemaker centre sits on 4.4 hectares and is within the local council’s Highpoint activity centre planning area, which has a preferred height of between six and 10 levels, potentially allowing for future development..
Review our other transaction data at ReSourceData.
* indicates unconfirmed price or apportionment of a portfolio sale