Aventus spends $219m on Australian shopping centres
The Brett Blundy-chaired Aventus Property Group has snared Australia’s biggest portfolio of large-format retail centres, snapping up a five-strong collection from US private equity powerhouse the Blackstone Group for $219 million.
The centres, across NSW, Victoria and Queensland, had been sought by Aventus even before it listed last year and the deal was introduced by Lachlan MacGillivray of Colliers International and Dan and Sam McVay of McVay Real Estate.
The portfolio, which is heavily weighted towards metropolitan Sydney and Brisbane, was picked up on a weighted average capitalisation rate of 7.38%, and Aventus sees the chance to buy more centres.
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“We are the largest pure landlord in large format retail in the country and we control 10-11% of the entire market but there is still a huge opportunity for further consolidation,” Aventus chief executive Darren Holland says.
Despite the tightening of capitalisation rates in the sector, Holland says this is concentrated in the best assets, and Aventus relies on its active management to boost returns, allowing it to benefit in the future.
“If you look at the sector on a global basis … compared to global peers there is further cap rate compression to come,” he says.
Aventus chairman Brett Blundy, left, with his chief executive Darren Holland. Picture: James Croucher.
The portfolio includes Home Centrals in Bankstown and McGraths Hill, both in NSW, as well as a centre in Shepparton, in regional Victoria. It also includes the Logan MegaCentre and Macgregor MegaCentre, both in Queensland.
The Australian revealed in March that Blackstone was preparing to offload the portfolio of homemaker centres along the eastern seaboard, including assets that were developed by Valad Property Group.
The new centres boast stable income streams with 83% leased to national or listed retailers including Harvey Norman, Freedom Furniture, Spotlight and The Good Guys. Most carry the potential to add value via asset management and development plays.
Aventus yesterday undertook a three-for-20 accelerated non-renounceable entitlement offer via Macquarie and UBS at a fixed issue price of $2.03 to raise $104.5 million. Blundy, who owns a $230 million stake in Aventus, did not participate in the raising but provided underwriting support.
A new $100 million tranche of debt will also be entered into with existing lenders.
The deal will take Aventus to 20 centres, with over 470,000sqm of retail showrooms on a site area of over just one million square metres, with the portfolio valued at about $1.2 billion.
Aventus bumped up forecast funds from operations to 8.7c per unit for the first half of 2017.
This article originally appeared on www.theaustralian.com.au/property.
