UK giant breaks yield record on purchase of Scentre's Casey Central shopping centre
Matthew Cranston and Nick Lenaghan
British investment giant M&G Real Estate has bought Scentre Group’s Casey Central Shopping Centre in the far south of Melbourne for more than $220 million and set a new record for yields on sub-regional shopping centres.
M&G Real Estate, one of the world’s largest property investors, purchased the centre on a fully leased yield of about 5.5 per cent. The closest yields for sub-regionals over $100 million include Runaway Bay in Queensland on 5.91 per cent fully leased, and The Shops at Ellenbrook, in Western Australia, on 5.75 per cent. Scentre declined to comment on the deal, due to settle next year.
Located about 48 kilometres from Melbourne’s city centre in a burgeoning residential south-eastern corridor, Casey Central was re-opened in March following a $155 million redevelopment.
The shopping centre is about 48 kilometres from Melbourne’s city centre. Photo: Urban Angles
Originally acquired in 2005, what was once a small neighbourhood centre of 6500 square metres has been transformed into a new 28,700-square-metre sub-regional shopping centre providing full-line Coles and Woolworths supermarkets, an Aldi supermarket, major fresh-food precinct, Target discount department store and 80 specialty shops.
JLL’s head of retail investments for Australasia Simon Rooney was appointed to sell the asset on behalf of Scentre.
Lachlan MacGillivray, head of retail investment at Colliers International, introduced M&G but declined to comment.
Casey Central is the largest individual sub-regional shopping centre sold this year following the sale by the WA-based Perron Group of Campbelltown Mall to Charter Hall for $197 million and divestments by Vicinity Centres, which has been the major seller of sub-regional centres this year.
M&G Asia Property Fund has a 25 per cent stake in Westfield Doncaster, one of Melbourne’s premium regional shopping centres, alongside Scentre.
Scentre is overhauling its portfolio, last week opening about $500 million worth of redeveloped malls in Sydney and Brisbane. It upgraded two of its main centres, spending $310 million on Westfield Warringah Mall in Sydney and $170 million on Queensland’s North Lakes expansion. Scentre is now focused on a series major mall redevelopments with about $915 million planned in total this year.
