Australian real estate funds manager, Centuria Capital Group (ASX: CNI or “Centuria”), has expanded its $3.2billion retail assets under management with the c.$70million acquisitioni of Halls Head Central, WA.

The 19,373sqmii subregional shopping centre is anchored by supermarkets, Coles and ALDI, as well as discount department store, Kmart. These retailers are complemented by two mini-majors, 50 speciality shops and two freestanding pad sites. In total, 64% of gross income is generated from non-discretionary tenants and the asset attracts 2.4 customer visits annually. The asset provides a 3.3-year WALEiv and 100% occupancyv.

The centre, located along Old Coast Road, sits on nine hectares and its low site coverage of 22% provides potential development or land banking opportunities across c.10,000sqm of surplus land. 

The counter-cyclical retail asset was secured at c.40% below its independently assessed replacement costvi.

Jason Huljich, Centuria Joint CEO, said, “Hall Head Central provides a compelling, counter-cyclical investment opportunity within WA’s second largest city, Mandurah. The centre benefits from a high proportion of non-discretionary retailers while presenting value-add opportunities through tenant remixing or potential redevelopment.

“WA remains a standout state for retail property. Greater Perth’s population has increased by 3.6% throughout the previous 12 months[ix], and when coupled with low forecast retail supply and vacancy, it provides compelling fundamentals for the retail sector.”

The acquisition will underpin a single-asset, closed-ended wholesale fund named Centuria Halls Head Central Fund.

Bruce McCully, Centuria Head of Retail, said, “Halls Head Central is now our third retail asset within the City of Mandurah.  Centuria has deep market experience within the region, actively managing the Erskine Shopping Centre and Mandurah Greenfields Shopping Centre.

“With limited new supply of retail assets, due to construction supply pressures, coupled with a strong population growth, we believe tenant demand will continue to outstrip supply for well-maintained subregional shopping destinations across Western Australia.”

Halls Head Central provides customers with exceptional amenities including on-grade parking for 960 vehicles, an enclosed air-conditioned mall, Wi-Fi, modern toilet and parenting facilities, children’s playground and a generous alfresco dining precinct.

The Centuria Halls Head Central Fund will provide an initial five-year term and is expected to be offered to wholesale investors from Monday, 20 May 2024. It has forecast starting annual distributionvii of 8.0% paid monthly, and a target 13.5% IRRviii. The Fund has a targeted equity raise of $41million with investments starting from $100,000.

The asset’s high-profile position along Old Coast Road is the central arterial roadway connecting regional hubs, Rockingham and Bunbury. Its 247-metre street frontage is exposed to 40,500 vehicles passing the centre each day (14.7million annually). Halls Head is positioned c.75km south of Perth’s CBD.

CBRE’s Simon Rooney noted, “The transaction demonstrates continued demand, particularly by private capital for sub-regional assets with a focus on non-discretionary spending, particularly those which offer strategic value-add opportunities.”

Settlement is anticipated in July 2024.

CBRE’s Simon Rooney and James Douglas were the appointed sales agents.

Related Reading:

Looming undersupply for Western Australia’s retail market - CBRE | Commo.

Busselton Boulevard Shopping Centre sold Centuria by CBRE & VPG | Commo.

Coles Anchored Whiteman Edge Village Brabham WA sold $39m by JLL  | Commo.

Perth’s Midland Gate Regional Shopping Centre Transacts at $465 million - CBRE & Colliers  | Commo.

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Centuria secures 21ha Katunga Fresh Glasshouse Victoria | The Industrialist

Centuria announces senior internal promotions | Commo.

Centuria increases stake in strongly performing real estate finance business  | Commo.

Centuria secures $18m Wetherill Park industrial facility | The Industrialist