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A bustling shopping centre in Perth’s north has fetched $76.25 million in a deal that solidifies the strength of Western Australia’s retail sector.
Dianella Plaza, roughly 8 kilometres north of the central business district, is the fourth retail acquisition for Perth-based funds manager Greenpool Capital, which has amassed $468 million in property since 2021.
Vicinity Centres was the seller in the off-market deal that was managed by Simon Rooney at CBRE. Anchored by the long-term tenancies of Coles and Woolworths, and currently at 95 per cent capacity, the centre’s sale is indicative of the high level of desire for stable retail offerings particularly in the country’s west.
Mr Rooney reported strong interest for retail assets such as this in the sub-$100 million market, noting that even with financing becoming a higher hurdle, the buyer pool is in fact expanding.
“Despite recent interest rate increases, the sub-$100 million retail centre market has continued to increase in buyer depth, demand and overall transaction volumes in 2023, dominated by private capital and attracted by compelling returns, adjusted values and robust underlying trading performance,” Mr Rooney said.
“The overall outlook for retail property is positive both from an owner and investor standpoint. Rents and values have gone through a recalibration coming out of COVID, with minimal recent or forecast supply and corresponding increased demand, an expanding buyer pool and increased liquidity, allowing owners to streamline and reposition portfolios and investors securing access to historically tightly held high-quality assets,” he added.
Greenpool Capital is one such buyer that has been active in the subsector and beyond, having recently purchased Western Australia’s Forest Lakes Shopping Centre for $81.5 million in July 2022. In the last few years, the fund also became the owner of North Adelaide Village in South Australia for a price tag of $50 million, and Runaway Bay Shopping Centre in Queensland, which it acquired for $260 million.
The fund paid approximately $4.25 million above what Dianella Plaza was valued in Vicinity Centres’ June 2023 books. With 17,138 square metres of food, service and convenience-based businesses, it currently generates an annual turnover of $123.4 million with a passing yield of 6.65 per cent and a fully leased yield of 7.38 per cent.
Undoubtedly the firm hopes to achieve full leasing as the year draws on, and is reportedly also eyeing the 17,735 square metres of adjoining separately titled land for expansion, considering both a residential project and tavern.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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