Major changes coming to Logan Hyperdome in $678m deal

MA Financial has plans to revamp the Hyperdome Shopping Centre it is buying from QIC Real Estate.

The top end of the shopping centre market is taking off, with MA Financial launching a new fund that has ambitions of overhauling the massive Logan Hyperdome complex south of Brisbane that it is buying for $678m.

The asset manager is tying up a deal – brokered off-market by CBRE’s Simon Rooney – to buy the sprawling shopping centre and associated properties from Queensland government-backed manager QIC Real Estate.

The parties declined to comment, and the agent was unavailable.

The regional complex is selling on a 7 per cent initial yield, which will reflect its status as one of the largest retail assets to trade this year.

While the market is bouncing back, the purchase will show a large discount to the complex’s peak valuation.

This shows both the strain larger managers have come under from redemptions, and the structural shifts in the shopping centre industry, which savvy buyers have capitalised upon. But MA Financial is not only relying on picking up the centre at a low point in the cycle.

It is betting on its hands-on-approach in order to boost returns.

Plans are afoot to boost the tenancy mix and lift the performance of existing retailers, with big name retailers in the frame.

Logan Hyperdome Shopping Centre is set to change ownership.

Fundraising documents obtained by The Australian show the manager wants to activate dead space in the centre by targeting non-retail usages for a vast dormant area that was once occupied by Myer.

Bunnings have also expressed interest in purchasing some surplus land to develop a full-line store, which the manager expects to lift traffic.

The listed asset manager is at the vanguard of companies buying up large-scale shopping centres, getting in as values in this area have yet to really take off in the same way that smaller centres have done.

The value of big shopping centres was crunched during the coronavirus crisis and, before that, by the e-commerce boom. They were also hit by a period of rising interest rates, but buyers have already flocked back to mid-range shopping centres that specialise in essential services and daily needs.

Now, the focus has been on the larger end where institutions still need to unload assets, although this trend appears to be coming to an end.

The MA Hyperdome Town Centre Fund will own the Hyperdome Shopping Centre, a large format retail centre called Hyperdome Home Centre, and properties including an office block, Loganholme Shopping Village, and development sites.

The price is split between $523m for the shopping centre, with a passing yield of 7 per cent, and $68.5m for the home centre which will show about 7 per cent, with other parts of the site accounting for the remainder.

Once the asset is leased up and renewal strategies are put in place, the yield will hit about 7.25 per cent.

MA Financial will reposition the Loganholme Shopping Village and lease it up before a potential sale. It will also boost the night-time experience, building on plans by Event Cinemas to refurbish and introduce a first-to-market Screen. That will be the first to be built in Brisbane.

The manager will sell surplus land to developers with a view to boosting the precinct. One site is likely to be sold to aligned developers, and another could be used to expand the home centre. A site fronting the Pacific Highway site is likely to be sold to Bunnings or a company like Costco.

The manager is seeking to raise $405m for the fund, which is one of Queensland’s largest and most strategic retail landholdings.

MA Financial will overhaul Brisbane’s Hyperdome Shopping Centre after wrapping up its purchase.

QIC sold as it had faced heavy redemption pressures, though the manager has said previously it has stabilised its platform and is focused on other large sites.

The -term growth as it sits in the southeast corridor of Brisbane, which has been at the epicentre of housing growth.

The property spans 44ha in Shailer Park, and less than a quarter of the site is occupied by buildings.

Hyperdome records annual turnover of about $627m, The centre has near full occupancy of 98 per cent and is anchored by Coles, Woolworths and ALDI, which generate more than $151m. QIC has also spent more than $70m on boosting its appeal.

After buying funds house IPGeneration, MA Financial has jumped to become one of the country’s largest integrated retail real estate platforms. It manages about $3.7bn in retail property spanning and employs over 250 retail real estate specialists.

MA Financial’s Core Real Estate’s leaders include IPGeneration founder Chris Lock, and industry veterans David Blight, Greg Miles, and Graham Terry.