Perth-based Greenpool Capital in partnership with Qualitas has spent $132 million to take a 50 per cent stake in the Runaway Bay Centre.
The off-market deal follows Perron Group’s $128-million spend with Vicinity Centres for the other 50 per cent of the prominent subregional retail centre last month.
Vicinity Centres chief executive Grant Kelley said the divestment deal would strengthen Vicinity’s asset portfolio.
“We have divested an asset at a significant premium to book value and invested in the fast-growing outlet sector, where Vicinity is competitively advantaged and can extract additional value,” Kelley said.
“While Runaway Bay has been a solid asset within our portfolio, this transaction reflects our willingness to recycle our capital into assets with better long-term growth prospects, in this case, in the same attractive catchment.”
Vicinity recently spent $358 million on a 50 per cent stake in Harbour Town on the Gold Coast, and is now in co-ownership with Lewis Land Group. The deal is expected to finalise at the end of this month.
“We are also delighted to enter into a new strategic partnership with Lewis Land Group and confident that our collective expertise in retail property investment and management will drive sustainable, long-term returns for both parties,” Kelley said.
Kelley said the combined transactions were expected to deliver Funds From Operations accretion of 0.14 cents per security.
CBRE’s head of retail capital markets Simon Rooney negotiated the two Runaway Bay transactions, with the combined $260-million purchase price boosting, which he said took Queensland retail transactions to almost $3 billion this year.
“Strategic off-market transactions such as Runaway Bay reinforce the ability for retail owners to secure competitive pricing and prompt transaction outcomes, with the deal being struck at a price above Vicinity’s most recent publicly reported book value,” Rooney said.
“By acquiring the residual 50 per cent interest in the Runway Bay Centre, Greenpool Capital and Qualitas have strategically secured both management and development control of the centre, which occupies an under-utilised, 124,700sq m site and presents significant mixed-use development opportunities.”
Rooney said he was anticipating a further $500-million retail deals across the remainder of the year.
Greenpool Capital acquired a North Adelaide Village for $50 million last year, which was also in partnership with real estate investment group Qualitas.
Overall, retail spending in the main trade area is projected to increase from $4.1 billion to $5.5 billion by 2031, representing strong average annual growth of 2.9 per cent, supported by an established, densely populated and growing trade area population of nearly 240,000 residents.