Armstrong Creek Shopping Centre sells in $55.6m deal
Armstrong Creek Shopping Centre has sold in a $55.6m deal less than a year after opening for business.
Listed fund manager Home Consortium’s Daily Needs REIT has acquired the Coles-anchored retail hub from national developer Wel.Co.
It’s the third shopping centre traded in Geelong this year as the city’s population growth continues to buoy investor confidence in major retail offerings.
A new 15-year lease to Coles underpinned the latest sale of the 9755sq m Armstrong Creek centre, which is also home to a selection of smaller retailers.
The complex, at 500-540 Torquay Road, opened in September and sits within Wel.Co’s Armstrong Creek Town Centre, the largest privately owned town centre in Australia with an end value of $1 billion.
Wel.Co founder and managing director Andrew Welsh said HomeCo had purchased the property unconditionally and would settle at the end of the month.
Mr Welsh said the sale to one of Australia’s largest fund managers was a big endorsement of the Armstrong Creek development.
“Armstrong Creek Town Centre already plays an instrumental role as the retail and commercial epicentre for the Geelong growth corridor,” he said.
“With the accelerated growth of the Armstrong Creek area through the last 12 months, we are bringing forward our delivery time frames for the future stages and are currently rolling out our master planned strategy.”
Future town centre plans include 75,000sq m of retail, 50,000sq m of non-retail floor space and more than 1000 dwellings.
Colliers International retail investment services directors Tim McIntosh and Mike Crittenden brokered the sale on a core cap rate of 6 per cent with a rental guarantee for 12 months.
“Regional Victorian retail investments secured by ASX-listed covenants are one of the most highly sought-after commercial investments by both institutional and private investors currently,” Mr McIntosh said.
“The investor focus is driven by confidence and security in the undoubted covenants,
significant regional stamp duty concessions and recent outperformance of regional growth areas compared to metropolitan Melbourne.”
HomeCo Daily Needs REIT portfolio fund manager Paul Doherty said the Armstrong Creek Shopping Centre was an attractive proposition as it had the only Coles supermarket in the primary trade area with a new 15-year lease to 2035.
“The centre’s strategic location provides exposure to the high population growth corridor of the Geelong region and forms an integral part of the rapidly evolving Armstrong Creek Town Centre,” Mr Doherty said.
Newcomb’s Bellarine Village shopping centre also sold last month in an off-market deal understood to be worth $38m.
That trade followed a private Melbourne investor’s $25.1m purchase of stand-alone Woolworths supermarket at Torquay in February.