Charter Hall swoops on major Geelong shopping centre in $146m off-market deal
Major Australian shopping centre investor Charter Hall has expanded its reach in the Geelong market with a $146m off-market purchase of Corio Village shopping centre.
Charter Hall secured the 33,600sq m Geelong northern suburbs mall in a transaction managed by Nick Willis and Sam Hatcher for JLL.
The centre is anchored by Coles, Kmart and Woolworths and about 75 other tenants, and boasts a high performance recording around $200 million in annual turnover.
Aldi anchored shopping centre snares big sale price
The sale demonstrates continued investor confidence in subregional shopping centres, driven by their essential role within communities and robust tenant mix.
The sale follows a $20.58m transaction of the Aldi-anchored neighbourhood centre, Bell Park Plaza.
Founder and CEO of IP Generation Chris Lock said the sale of Corio Village marks the end of a six-year comprehensive asset improvement strategy, which saw $45m added to the value of the centre after that time.
'Through targeted repositioning works, we have successfully transformed the centre into a core convenience hub for the community, while delivering strong outcomes for our investors.
'We remain focused on the retail sector and continue to seek opportunities.'
As part of the transformation, IP Generation reopened the centre's basement, which originally featured a ten-pin bowling alley, with General Public opening an entertainment hub including 11 ten-pin bowling lanes, pool tables, an electronic darts board and other arcade games, as well as food and craft beer, while US gym franchise Planet Fitness also opened its first local location at Corio Village.
IP Generation bought Corio Village from Vicinity Centres for $101m in 2019.
Charter Hall was attracted by the centre's strong returns and significant growth prospects.
Charter Hall Retail chief executive officer Ben Ellis said the Corio acquisition continues the successful growth of its convenience partnership acquisitions.
'We pursued Corio for its anchor supermarket convenience attributes, which reflected a 7 per cent cap rate,' he said.
'Combined with forecast income growth, it's expected to deliver accretive returns for the partnership.'
Charter Hall managing director David Harrison said the business has always had high conviction on convenience retail, and see it continuing to outperform discretionary retail larger malls.
'We know these catchments well, having also acquired Leopold south of Geelong, along with the very successful development of a Woolworths, Bunnings and Officeworks anchored shopping centre at North Altona in the southwest of Melbourne metropolitan area,' Mr Harrison said.
'The fact that most convenience centres can be acquired at deep discounts to replacement cost is a core value metric we focus on within our selective acquisition program.'
JLL senior director Nick Willis said access to high-quality sub-regionals is becoming increasingly constrained amid a global resurgence in capital demand for the sector.
'This transaction provides evidence of the shifting buyer profile away from the manager or syndicator groups who have led the acquisitions charge over the last five years, to now increased participation from institutions and REITs as they shift back to net acquirers.'
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