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Primewest Picks Up Gold Coast Retail Centre for $66m


Primewest has purchased a large format retail centre on the Gold Coast for $66 million.

The 14,800sq m Robina Home and Life complex was recently developed and sold by QIC’s real estate arm.

The homemaker centre, on a 3.6ha site, features 13 large-format retail tenancies, anchored by Nick Scali and The Good Guys, and a cafe.

Based on fully leased net income, the deal was struck on a yield of about 6 per cent.

The centre, at 550 Christine Avenue, adjoins Bunnings Warehouse—also divested by QIC, in December for $28m—was sold with a weighted average lease expiry of 3.3 years.

Founded by John Bond, the son of the late tycoon Alan Bond, Primewest has more than $4.9bn of assets under management across Australia and the west coast of the United States, across the retail, industrial, commercial and residential sectors.

The listed fund manager is a significant owner in the large-format retail sector, with over 18 assets under management totalling over 300,000sq m and another centre currently under development.

Primewest has been actively targeting neighbourhood shopping centres across the country under a new institutional mandate and $300m fund, formed in June last year.

Primewest said the homemaker centre will seed a new private unlisted trust, the PW Large Format Retail Trust No.2.

Primewest executive chairman John Bond said the pandemic had shone a light on a number of successful retail assets that had performed well during the crisis due to a strong tenant mix focusing on non-discretionary or serviced-based retailers.

“The company remained very confident in the large format retail sector and saw a clear opportunity for growth [in] Robina,” Bond said.

“[The shopping centre] is at the epicentre of the rapidly expanding Robina community which will benefit from more than $17 billion worth of planned investment in the immediate Gold Coast vicinity.”

Last year, Primewest seeded the fund with the $34.8m acquisition of Spring Farm Shopping Centre, south of Sydney, from Woolworths.

It also purchased Pemulwuy Marketplace and West Ryde Marketplace in Sydney for a combined $91.5m from Charter Hall Retail REIT.

In 2019, Primewest bought Stockland’s Tamworth Homespace, a single-level, large-format retail shopping centre 4km south of Tamworth’s CBD, and Coffs Harbour’s Moonee Marketplace for $30.5m.


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Irongate Group Acquires Two Brisbane Industrial Properties


Irongate Group (ASX: IAP; JSE: IAP) has entered into agreements to acquire:

  • an industrial facility located at 57 – 83 Mudgee Street, Kingston QLD (Kingston Property); and
  • an industrial facility to be constructed at Lot 24, Dunhill Crescent, Morningside QLD (Morningside Property).

Both properties are being acquired on a fund through basis. The purchase price of the Kingston Property is $14,320,000 representing an initial yield of 5.73%, and the purchase price of the Morningside Property is $5,932,000 representing an initial yield of 6.02%.

Commenting on the acquisitions, IAP CEO, Graeme Katz, said, “the Kingston Property will comprise two brand new, high quality generic warehouse and distribution facilities with 2,270m² leased to Construction Sciences for 10 years with fixed annual escalations of 2.5% and 3,250m² leased to Wako Kwikform for 8 years with fixed annual escalations of 3.0%. The Morningside Property comprises 1,016m² of space that will be leased to 3M Australia to be used as its Queensland head office and last mile distribution facility. The lease term is 10 years with fixed annual escalations of 3.0%.

“Both acquisitions are consistent with IAP’s strategy of acquiring good quality industrial properties with strong tenant covenants and long lease terms. IAP believes the Brisbane industrial market currently represents relative value, and the acquisitions complement IAP’s recent Brisbane industrial acquisitions in Brendale (completed in January 2021) and Pinkenba (completed in March 2021). The acquisitions will increase IAP’s exposure to industrial property to 34% by both income and value.”

Both acquisitions are due to complete in mid-May 2021.


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Logos and Partners Launch $1bn Asset Hunt


Logos Group has partnered with Kohlberg Kravis Roberts and Abu Dhabi’s Mubadala Investment Company to launch a $1-billion fund to target Australian industrial assets.

The Logos-KKR-Mubadala joint venture aims to acquire and develop logistics facilities predominately across the key eastern seaboard markets, chiefly in Sydney, Melbourne and Brisbane.

This marks Middle Eastern pension fund Mubadala’s entry into the Australian industrial market.

The Abu Dhabi sovereign wealth fund currently controls a $232-billion portfolio across six continents.

KKR and Mubadala will be the major investors in the fund with Logos to take a smaller interest.

CBRE Capital Advisors acted as financial advisor to Logos for the venture’s capital raising.

The capital raise was led by the head of capital markets for Asia Pacific, Greg Hyland, and the head of international capital—Pacific and South East Asia, Stuart McCann.

The venture’s seed property will be a 18.2ha development site at 3746 Ipswich Road, Wacol in south-western Brisbane, which was bought from New Zealand-based Fletcher Building.

Logos has begun plans to re-develop the site as a master-planned $200-million logistics estate on both a pre-lease and speculative basis with up to 95,000sq m of industrial space.

The property, which has access to Brisbane’s key arterial road network near the interchange of the Ipswich and Logan motorways, was occupied by Rocla Concrete Pipes, a subsidiary of Fletcher Building.

“We are pleased to have established a new venture with experienced global investors, KKR and Mubadala,” Logos Australia managing director Darren Searle said.

“[It will enable Logos] to continue to meet the ever-growing demand from global, multi-national and domestic customers for high-quality logistics facilities within Australia.

“We see the Wacol property as a strategic seed asset for this venture and are pleased to have facilitated this transaction from Fletcher Building, with whom we have a long-standing relationship.”

Logos is now backed by ARA Asset Management after the Singaporean investment house took a majority stake a year ago, buying out Macquarie’s position.

Logos is also backed by Ivanhoe Cambridge, a Canadian real estate industry player.

Logos founders John Marsh and Trent Iliffe also have a stake in the growing platform.


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Brisbane Office Vacancies Heading for 15pc Peak


Brisbane CBD office vacancies are expected to peak at more than 15 per cent this year

They will improve in 2023 but the level of sub-lease space being marketed remains a wildcard, according to the Knight Frank Brisbane CBD Office Market report, released this week.

Under the pressure of new supply and further negative net absorption, the report found, vacancies in the city’s office market will reach a 15.7 per cent peak in June.

Knight Frank Queensland partner and report author Jennelle Wilson said office vacancies were expected to remain elevated during next year.

“We will then begin to see material decreases during 2023,” Wilson said.

“In the medium term, vacancy is expected to remain above 12 per cent through to 2024-2025, which will continue to limit supply additions without substantial pre-commitment.”

The Knight Frank research found that leasing activity during the pandemic has been dominated by smaller tenants, with 85 per cent of leasing activity, excluding renewals, last year and into 2021 largely for tenants requiring less than 1000sq m.

Knight Frank head of office leasing Queensland Mark McCann said tenant activity was on the horizon with tenant engagement from larger users expected to increase from the middle of this year.

Tenants active in the CBD market and expected to make their next location decision announcements soon include CUA (6000sq m), KPMG (8000sq m), McCullough Robertson (4000sq m), APA Group (4000sq m) and the Federal Government (about 38,000sq m), according to the report.

McCann said the great unknown in future vacancy remained the level of sub-lease space being marketed.

“The actions of tenants during the next 12 months in this space—to either reoccupy or relinquish—has the potential to move the needle for the total vacancy rate,” he said.

The Knight Frank report found investment market activity is rebuilding after a slow 2020.

Last year turnover totalled $607.6 million, representing the lowest total transaction level since 2008 and 2009, following the GFC.

This year so far $210 million in deals have settled and $530 million is under contract, which the report notes, points to a strong year ahead.

Assets under contract include “the Gold Tower” at 10 Eagle Street, snapped up by local private syndicator Marquette Properties.

Wilson said offshore activity in the investment market during last year was limited to the settlement of the one major sale—66 Eagle Street.

This transaction comprised 63 per cent of the total transaction activity, with the remaining sales to domestic players.

“Despite few transactions and limited offshore active buyers, yields have remained firm for core assets, with the yield band widening to reflect assets with short-term vacancy exposure,” Wilson said.


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