Haben expects a Townsville mall to deliver an 8.5pc return

Haben expects a Townsville mall to deliver an 8.5pc return

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“We have been attracted to Townsville due to its robust and diverse economy underpinned by the federal government’s commitment to relocate a significant portion of the military to the region,” Haben managing director Ben Finger said.

The Townsville deal – it was brokered by JLL’s Nick Willis and Sam Hatcher – is the latest in a series of regional mall trades, which are changing hands on near-8 per cent yields in the lead-up to Christmas. Other deals include Fawkner buying Settlement City on a yield of 7.77 per cent. Fawkner is also in due diligence talks to acquire Cairns Central on a yield of about 8 per cent.

Rosebud Plaza which has undergone a $30 million redevelopment, sold for $134.5 million on a yield of about 6 per cent. 

Also divesting retail assets is ASX-listed Charter Hall Retail REIT, which on Tuesday said it had signed contracts to sell two of its malls, Rosebud Plaza on Victoria’s Mornington Peninsula and Southgate Square in Adelaide for a combined $225.5 million.

Highlighting the strength in demand for smaller malls anchored by supermarkets and non-discretionary tenants, both properties sold in line with their June 2023 book values.

Rosebud Plaza, which has undergone a $30 million redevelopment including adding a new Woolworths to an existing Coles and Kmart, sold for $134.5 million on a yield of about 6 per cent.

Southgate Square in Morphett Vale, which includes a Coles, Target and Aldi, sold for $91 million on a yield of about 5.75 per cent.

Both were acquired by private high net worth investors following unsolicited off-market offers. A JLL team led by Stuart Taylor negotiated the sale of Rosebud Plaza. The divestments, which will settle in February (Southgate) and June (Rosebud) next year, will reduce CQR’s gearing to 25 per cent from 29 per cent.

Charter Hall Retail chief executive Ben Ellis said the divestments were part of CQR’s “ongoing active asset management and focus on improving portfolio quality while maintaining balance sheet strength”.

The trust reaffirmed its full-year operating earnings guidance of 27.4 cents per unit, of which 90-95 per cent will be paid out in distributions to unitholders.

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