Centennial and its retail joint venture partner Parkstone have kicked off the year by purchasing their second top performing regional shopping centre asset in Orange, 250km west of Sydney in the Central Tablelands – for $37.4m.

'The Village on Summer Street' (the Village) is a prominent neighbourhood centre in Orange's city centre occupying a 21,090sq m site representing the single largest landholding in the CBD. 

The retail component which currently comprises just over 23 per cent of the site's coverage or 4,974sq m of gross lettable area (GLA), gives the new owners significant scope to maximise returns and build on the centre's tenancy mix.

Centennial and Parkstone acquired a 100 per cent freehold stake in The Village on Summer Street from hospitality identity Bill Gravanis and renowned architect Paul Saunders, that was partly funded by a $20m capital raising, which closed early and oversubscribed in December 2024. 

The closed-end 'Village on Summer' fund is targeting an internal rate of return (IRR) of 15 to 17 per cent per annum comprising a healthy income component based on the centre's dominant position in the region, its defensive characteristics derived from a retail mix geared towards non-discretionary retail spend, and its strong value add potential and convenient access to car parking.

The Village is anchored by Supa IGA, one of Australia’s top performing Dan Murphy's, ten specialty retailers and is supported by 268 car parks. The partnership is proposing to develop a further ~1,800sq m of retail space in the short term on the back of current demand from national retailers.

The centre was built in 1993 and underwent a significant $4m refurbishment in late 2022 leading to the Village winning a major building award from the Master Builders' Association of New South Wales in the latter half of 2024. 

Executive Director of Centennial, Paul Ford, said the fund manager and developer was delighted to be partnering with Parkstone in its second retail joint venture.

"Parkstone is a specialist retail investment manager with proven expertise working across many retail assets nationally," Mr Ford said. 

Parkstone's retail portfolio now comprises around $300m in assets under management across seven subregional and neighbourhood centres in New South Wales, South Australia and Queensland.

"We are fortunate to have a joint venture partner whose deep retail management experience and extensive retail tenant networks can be drawn upon to maximise returns for our investors while also supporting each centre's management team and retailers. 

"We are well on our way to scaling our retail exposure towards in excess of $1bn and during an attractive point in the retail sector cycle."

From an investor perspective, Mr Ford added the centre offered "strong defensive income based on its largely non-discretionary retail mix, positive growth indicators for the region and limited new supply of retail assets in the CBD."

Parkstone's Executive Director and co-founder, Christopher Day, said the group was equally pleased to be gaining a greater foothold into the flourishing Orange region, with its population growing in step with a thriving economy largely driven by diverse industry sectors including tourism, agriculture, health, education, retail, mining and government.

"Orange is a major regional centre and gateway to western New South Wales," Mr Day said. "It supports a catchment area of over 100,000 people from nearby towns and districts and is not dissimilar in demographics to our first retail joint venture with Centennial formed in early 2024, when we acquired Bundaberg's 21,000sq m Hinkler Centre in central Queensland. 

"Like Bundaberg, Orange is experiencing strong and sustained population growth driven by diverse employment opportunities, government infrastructure spending and access to quality services including health and education facilities. These economic drivers are underpinned by more affordable housing options compared to the state capitals that are leading to sustained growth in the regions, underscored by surging migration numbers.

"The acquisition of The Village on Summer shopping centre not only broadens our exposure to a thriving regional centre in New South Wales, it also allows Parkstone to draw from our deep retail management experience to hone, develop and deliver the best shopping destinations and experiences for the communities where we operate," Mr Day said.