Midland Gate joins rush of malls deals at $500m
The trade in major malls is heading west as Perth’s Midland Gate, a large regional shopping centre in the city’s fast-growing north-east, hits the market with expectations of at least $500 million.
The prominent mall, which occupies a 14.4-hectare town centre site, is controlled by ASX-listed Vicinity Centres, which manages it on behalf of a mandate client and Vicinity Retail Partnership.
It is the final interest held by Vicinity Retail Partnership, a wholesale fund for a small club of investors, including Future Fund and the Canada Pension Plan Investment Board, that was previously operated by Novion, a forerunner to Vicinity.
The offering comes amid an upsurge in retail real estate transactions, which rose to a record $12.8 billion last year after a flurry of deals in the final quarter helped the total top the previous high by 47 per cent.
The remarkable turnaround followed dramatic write-downs on shopping mall values during the first wave of the pandemic, but by last year values and rents had begun to stabilise, encouraging investors to step back into the market.
That momentum has rolled into the new year, with several deals already struck or finalised, such as Sentinel’s $400 million acquisition of Darwin’s Casuarina Square shopping centre.
Midland Gate comprises 68,600sq m, with its anchor tenants including Coles, Woolworths and Aldi, along with Kmart, Big W and Target and an eight-screen Ace Cinemas complex.
“The value proposition for regional shopping centres is now increasingly compelling for investors, given the attractive, superior comparative returns on offer, compared to most alternative commercial property asset classes, where pricing levels continue to be at historic highs,” CBRE’s Simon Rooney, who is handling the mall with Colliers’ Lachlan MacGillivray, said.
Mr MacGillivray said Midland Gate was the only regional shopping centre in its trade area, an urban growth corridor.
“Western Australia’s retail sales growth has consistently outpaced the national average, with the state having recorded retail sales growth of 2.6 per cent on average over the past decade,” he said.
