Melbourne-based fund manager Fawkner Property has acquired Cairns Central, a dominant and highly successful regional shopping centre in Far North Queensland, for $390 million.

Colliers’ Managing Director of Retail Capital Markets, Lachlan MacGillivray and McVay Real Estate’s Managing Director, Sam McVay, acted on behalf of the seller.

CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney, advised and represented the purchaser, Fawkner Property.

The sale of Cairns Central represents the second largest retail asset transaction for 2023, following Fawkner’s acquisition of Midland Gate Centre in Perth for $465m.” Mr MacGillivray said.

“The Cairns Central deal was also one of the few remaining opportunities to secure a 100% interest in a Regional Shopping Centre in this investment cycle. We expect availability for this calibre of product to tighten further in 2024 and beyond.”

The Cairns acquisition closely follows Fawkner’s Midland Gate Shopping Centre acquisition in Perth with PAG, Australia’s largest retail transaction in 2023, which settled last month for $465 million and that of Settlement City Shopping Centre in Port Macquarie for $107m. 

The Cairns deal, represents Queensland’s largest regional shopping centre transaction since November 2017, when AMP took out a 50% stake in Indooroopilly Central for $800 million from CSC.

It comes as investors continue to re-shift their investment focus to the regional shopping centre market, given the highly compelling returns, rebased market income and significant discounts to peak value on offer.

Mr Rooney said, “As the fundamentals continue to reset for high quality retail assets and the sector moves into a clear growth phase, domestic private capital and increasingly offshore institutional investors, are strategically teaming up with specialist domestic managers like Fawkner Property and are proactively engaging and seeking out high-quality regional shopping centre opportunities prior to this window closing.”

“Opportunities to acquire a 100% freehold interest in a market leading regional shopping centre with management rights are rarely presented. Fawkner Property securing two such opportunities at Midland Gate Perth and Cairns Central demonstrates their strategic and counter-cyclical investment approach,” Mr Rooney added, while noting that CBRE expects a strong start to 2024, with a further $1 billion in retail transactions earmarked to go under contract or exchange in Q1 2024.

The Cairns acquisition continues Fawkner Property’s market leading investment push into the regional and sub-regional retail categories, having acquired $1.7 billion in assets since 2021, including Midland Gate ($465.0 million) and The Square Mirrabooka in Western Australia ($195.0 million), Stockland Traralgon in Victoria ($84.5 million) and Mount Pleasant Centre ($162.5 million), Stockland Cairns ($146.0 million) and Stockland Gladstone ($139.0 million) in Queensland and Settlement City, Port Macquarie ($107.0m)

Cairns Central is strategically located within the Cairns city centre, is the only regional shopping centre within 350km and is the major shopping destination for the Far North Queensland region. The centre is ranked 1st across all regional shopping centres within Queensland for total MAT per square metre and ranked 11th nationally for all regional centres for total specialty productivity.

The centre occupies a substantial 94,290sqm site, with unrivalled access to public transport and connectivity to the Cairns city centre via the inter-connected Cairns railway station and Shields Street.

Comprising a gross lettable area of 51,972sqm, the centre is securely anchored by a highly productive Myer department store, dual supermarket offer of Woolworths and Coles, in additional to discount department stores Kmart and Target and an Event Cinemas complex.

“The sale campaign for Cairns Central attracted strong international and domestic buyer demand.” Mr McVay added.

“We were very pleased with the calibre of investors that ran the ruler over Cairns Central, with the outcome being a testament to its outstanding sales performance and market dominance.” Commented Mr McVay. 

Related Reading:

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