Henkell Bros head for Hastings in $32.1m shopping centre deal
Nick Lenaghan and Larry Schlesinger
Private syndicator Henkell Brothers Investment Managers has found refuge from peak prices in Melbourne’s CBD commercial market, buying a retail centre outside the city for $32.1 million.
The acquisition of the Hastings Central Shopping Centre, on the Mornington peninsula, was struck on a 6.2 per cent yield.
The first shopping centre to change hands in the Victorian market this year, the property is anchored by a Kmart with four years remaining on the lease and an Aldi supermarket. It has 13 specialty shops.
Henkell Brothers, one of the better-known private players in the local market, typically invests alongside and on behalf of a group of European investors.
When the investment manager divested a Collins Street property two years ago, managing director Hans Henkell said it would be difficult to buy back into the CBD market as commercial prices neared a cyclical high.
“The dilemma has even got even worse. It’s extreme,” Mr Henkell told The Australian Financial Review on Tuesday.
“We’re classically CBD investors. You cannot invest, neither in the fringe nor the centre, in any sensible way. You have to go out to where there are still yields. The commercial market has driven up so high.”
About two years ago the Henkell platform sold a four-storey retail and office building at 600 Collins Street for $60 million on a yield a little above 3 per cent. Developer Landream is now pursuing a residential project designed by Zaha Hadid on the site.
The privately held Hastings shopping centre has 8015 square metres of lettable space. CBRE’s Justin Dowers, Mark Wizel and Kevin Tong handled the asset, alongside transaction advisers Payton Capital’s David Payton and Rob Fellows.
Mr Dowers said consistent house price growth on the peninsula assisted the spending capacity of residents and shopping centre performance in the region.
Mr Wizel noted the strong finish for the neighbourhood shopping centre market in Victoria last year, which set average prime yields at 5.52 per cent.
Among those deals, Wesfarmers-owned Coles sold a shopping centre it developed at Coburg for $38 million on a 4.94 per cent yield.
“The sale of Hastings Central Shopping Centre is a clear indication that the demand-supply imbalance within this market sector has compressed the yield differentiation between prime and non-prime shopping centres in the state,” he said.
In October last year Moelis Australia Asset Management sold the Healesville shopping centre in the Yarra Valley outside Melbourne for $29.9 million to a local private investor on a 5.6 per cent yield.
A month earlier a Chinese private investor paid $32 million to buy Geelong West’s Pakington Strand Shopping Centre from the listed Charter Hall Retail REIT on a passing yield of about 4.7 per cent.
