Charter Hall snares Arana Hills Plaza
The listed Charter Hall Retail REIT has snapped up Arana Hills Plaza and an adjoining Shell petrol station in Brisbane from superannuation fund-backed ISPT for $67.1 million.
The Arana Hills purchase reflects a capitalisation rate of 6% and will be earnings accretive in fiscal 2017.
The trust also confirmed a half-year distribution of 14.1 cents per unit and noted it had sold off three smaller centres for $72.2 million.
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After the deals, the trust’s portfolio value will be $2.57 billion and it has flagged a move to owning larger assets.
The 14,355sqm centre is a strongly performing convenience based shopping centre anchored by Coles, Kmart, a freestanding Aldi and the petrol station. It has also 23 specialty tenancies and car parking for 822 vehicles.
The centre also has potential for future development.
Charter Hall Retail REIT fund manager Scott Dundas says the group is reducing its exposure to freestanding and smaller neighbourhood assets in order to acquire larger, higher growth assets.
“Arana Hills Plaza is strategically located in the fast growing metropolitan Brisbane suburb of Arana Hills and provides the dominant supermarket anchored offering within its trade area,” he said.
The asset sales allowed the trust to turn off its distribution reinvestment plan for this half.
JLL’s Simon Rooney and Jacob Swan brokered the sale, with 12 groups vying for the asset.
“We continue to see a depth of institutional investor interest in strong performing sub-regional shopping centres, especially for assets in metropolitan locations, with strong trading characteristics and secure tenure,” Rooney says.
The sub-regional sector is on track for another significant year, with $2.1 billion worth of transactions recorded for 2016, albeit below the record $2.8 billion in 2015.
JLL says there has been yield compression of 40 basis points in the sub-regional sector over the 12 months to the end of September to an average of 6.61% nationally.
This article originally appeared on www.theaustralian.com.au/property.