Charter Hall ramps up deals to beef up convenience retail fund
Charter Hall has acquired the Burwood One Shopping Centre in Melbourne. Picture: supplied
Property funds powerhouse Charter Hall is locking in its status as the top buyer of convenience retail assets this year, finalising a $210m deal in Melbourne to buy a major complex from a Hong Kong investor.
The company has tied up its purchase of the Burwood One Shopping Centre in Melbourne, home of the country’s first Kmart, and is now in talks to acquire more assets off-market as it builds up its specialist fund in the sector.
The company is buying assets to fill out the portfolio held by its $2.5bn unlisted convenience retail fund, which is receiving backing from major institutions seeking out the safe returns from the sub-sector. This is delivering more certainty than traditional fashion-oriented malls and it is benefiting from the shift of investors to this end of the market.
Charter Hall has an overall convenience-focused retail portfolio spanning more than $16bn worth of retail centres, making it the largest owner in the field and giving it extensive ties with supermarket and specialty retailers nationally.
Charter Hall chief executive David Harrison is bullish about convenience retail assets and the company’s ability to consolidate in the still-fragmented industry. Other recent plays include buying Sydney’s Chullora Marketplace.
The company confirmed it had acquired the Burwood One complex, a dominant retail landmark in Burwood East, from a private Hong Kong-based investor. The acquisition was brokered off-market by Stonebridge agents Justin Dowers and Kevin Tong.
The centre occupies a prominent 58,800sq m corner site at the intersection of the Burwood Highway and Blackburn Road. It is fully leased and anchored by Coles, Kmart and ALDI, along with seven mini majors, 40 specialty stores and eight kiosks. The anchors are among the best-performing Coles and Kmart combinations nationally.
Charter Hall Retail chief executive Ben Ellis said the site was well positioned for future growth, as it is close to Deakin University and the planned Suburban Rail Loop East, as well as future value add with development potential.
“The high-quality Burwood One and Southport Park assets perfectly represent our strategy of investing in dual and triple supermarket anchored convenience shopping centres in strong metropolitan locations, with expectations of solid capital growth. CCRF will continue to deliver outperformance for our investors within a sector dominated by non-discretionary retailers,” he said.
Charter Hall has been active this week. Billionaire John Van Lieshout sold a shopping centre in Queensland’s Southport for $152.5m to the company after picking it up for a song in the wake of the Global Financial Crisis.
Southport Park was bought as Charter Hall snaps up convenience complexes around the country, using its heft as the country’s largest commercial property player to lock down off-market deals.
