M/Group buys Hervey Bay Pialba Place Shopping Centre for $36 million
M/Group has purchased Pialba Place Shopping Centre in the Queensland central coast town of Hervey Bay for $36 million, making it the third sub-regional retail asset acquired by the Perth-based property group.
Privately owned M/Group raised $22 million through a company-managed property investment fund to help fund the acquisition made on a yield of 8 per cent
The vendor was private owner Vinta Group and did not involve an agent, because M/Group conducted all the negotiations internally.
The acquisition follows earlier ones at at Wodonga Plaza in Victoria and Albany’s Chester Pass Mall and showed the company’s strategy of buying assets with potential for upgrading and repositioning in regional towns with good population growth, disposable income and employment, said M/Group managing director Lloyd Clark.
It targets shopping centres with an asset value of $20 million to $50 million.
“As other companies look to consolidate assets into large city shopping centres, we believe there is opportunity in the development of community hubs,” Mr Clark said.
“Our point of difference is our ability to blend this with our “value add” approach that stems from our property development pedigree, which also allows us to deliver strong capital growth through the repositioning of our assets.”
Sub-regional malls are coming under pressure. A third of the country’s sub-regional shopping centres failed to increase their annual turnover during the past year as the retail sector faced pressure from disruption and a cyclical slowdown, according to the latest Little Guns report.
The asset is a 3½-hour drive from Brisbane at the gateway to Fraser Island and on a 4.38-hectare site that occupies an island block surrounded by three street frontages.
Tenants in the centre include Coles and Big W. There were other opportunities to invest and improve the centre, M/Group director James Collis said.
“M/Group is already working on plans to reposition the Centre, including investing in a refurbishment,” he said. “We take a very hands-on management approach to backfilling and renegotiating tenancies for immediate gains.”
The company acquired Wodonga Plaza for $43.5 million in 2017 and the centre is now almost fully occupied. Its increased Weighted Average Lease Expiry has gone from under four years to just over six years.
