Primewest has splashed more than $70 million on a regional shopping centre in Western Australia.
The Centuria Capital Group subsidiary bought up the Northgate Shopping Centre at Geraldton with anchor tenants including Coles and Kmart for $71.2 million.
Geraldton is a major gateway town in Western Australia, and the fourth most populous in WA, according to Primewest’s head of retail Bruce McCully, who said the dominant shopping centre in the area was a “rare opportunity”.
“It benefits from strong tenant covenants with 80 per cent of the property’s gross income derived from ASX-listed, national and multinational tenants,” McCully said.
“Northgate Shopping Centre is the dominant retail precinct within Greater Geraldton, servicing a catchment of about 51,000 people across a 385km area, which provides a strong competitive advantage.”
McCully said the shopping centre was secured for a single-asset, unlisted wholesale property fund with a 7.25 per cent per annum two-year initial forecast distribution over a five-year term.
The shopping centre has a weighted average lease expiry of 4.7 years, and Kmart recently signed a 10-year lease.
The newly-established Northgate Geraldton Trust will be open to wholesale investors from October 13, with a target equity raise of $41.8 million.
“The acquisition adds to Primewest’s strong retail real estate portfolio, totalling more than $2.6 billion across daily needs and large format centres,” McCully said
“Primewest has been a significant investor in high-quality retail assets that provide compelling returns for our broad network of wholesale and retail investors.”
The shopping centre is a single level retail complex comprising 15,758sq m gross lettable area (GLA) on a 36,845sq m site.
JLL’s Nick Willis and Sam Hatcher facilitated the sale of the Northgate Shopping Centre.
Centuria and Primewest merged in a $600-million deal earlier this year to create a $15.5b portfolio of assets.
Primewest inked a joint-venture deal with a fund advised by BlackRock Real Assets to reportedly spend $260 million on the former AMP office tower in Perth in April this year.