Greenpool Capital purchases 50% stake in Runaway Bay Shopping Centre for $128 million

Perth’s Greenpool Capital in partnership with investment firm Qualitas has made its latest retail play, acquiring a 50% stake in the Gold Coast’s Runaway Bay Shopping Centre for $128 million. The deal was struck on a fully leased yield of 6.5%.

Qualitas, one of Australia’s leading alternative real estate investment managers, and Greenpool Capital, a specialist retail property investor, have acquired 50% of Runaway Bay Shopping Centre on the Gold Coast in Queensland for $128 million.

This acquisition represents a continuation of the retail investment strategy for Qualitas, targeting convenience-based centres located in strong growth catchments – with Runaway Bay on the Gold Coast being one of Australia’s most significant growth corridors.

Mark Fischer, co-founder and Global Head of Real Estate at Qualitas, said:

“We continue to see relative value opportunities in convenience-based retail centres, as the well-flagged structural and cyclical resetting of rents interplays with yields available on these assets compared to those in other defensive sectors. Runaway Bay Shopping Centre is a dominant centre within its catchment, tenanted by high-performing, non-discretionary and national chain covenants, located within a strong growth catchment, with a significant underlying land holding with potential for future value add development and an attractive entry point into retail capital value and yield cycle.”

Fischer added: “The Centre has benefited from capital investment in 2021, with the revitalisation of the fresh food and dining ‘Spine’ – a new indoor-outdoor casual dining precinct, taking advantage of the Centre’s waterfront location. We continue to seek strong value opportunities such as this for our investors as the sector recalibrates.”

Brad Osborne, Founder and Managing Director of Greenpool, said:

“The Runaway Bay acquisition builds on our strategy to invest in strong value-add, convenience-based centres with Tier 1 capital partners. Runaway Bay has strong fundamentals as a Centre and is further enhanced through significant landholdings in a growing catchment. Greenpool is looking forward to progressing this acquisition with Qualitas, which builds on a strong relationship following our recent co-investment in Adelaide’s North Adelaide Village.”

CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney negotiated the off-market sale on behalf of Perron Group, in the latest indicator of strengthening buyer demand for high quality, sub-regional shopping centre investments.

“With record historical pricing being achieved for freestanding and neighbourhood centres, astute investors are shifting their focus to high quality sub regional assets,” Rooney said.

“Joint venture opportunities with major institutional owners and managers are now also being actively pursued, particularly those offering future development upside. There has been particularly strong sub regional centre investment activity in Queensland of late, including the recent sales of the Mount Pleasant Centre in Mackay to Fawkner Property and Stockland Bundaberg to MA Financial for a combined total of $302 million.”

The 42,862m2 sub-regional centre presents as one of the premier sub-regional shopping centres in South East Queensland, benefitting from a diverse tenancy mix, with a focus on convenience, lifestyle and a necessity based, service and fresh food offer.

“Runaway Bay is an established, highly productive sub-regional centre and a solid tenancy base, with major, national and chain tenants comprising 88% of the total GLA,” Rooney said.

“The centre is located on a land rich 124,700m2 site, which is under-utilised and offers significant mixed-use development opportunities going forward.”

The sale follows a recent $13 million refurbishment and reconfiguration of the fresh food precinct together with the internal and external casual dining precinct, which is due to be completed this year, to capitalise on the centre’s attractive waterfront location.

The Runaway Bay centre is anchored by a strong triple supermarket offer of Woolworths, Coles, and ALDI together with dual discount department stores in the form of Big W and Target.

Rooney noted that the key major tenants – Woolworths, Coles, and Big W – all performed well above industry benchmarks.

Specialty tenant performance is also robust, with productivity being 31% above the Urbis benchmark. Moving forward, the centre is well-positioned to benefit from significant food expenditure within the main trade area (MTA) of $901 million, accounting for 55% of retail spending.

Overall retail spending in the MTA is projected to increase from $4.1 billion to $5.5 billion by 2031, representing strong average annual growth of 2.9%, supported by an established, densely populated and growing trade area population of nearly 240,000 residents.

*The above is an extract of an article first featured on Shopping Centre News under the title “Perron sells 50% stake in Runaway Bay Shopping Centre for $128 million”, published on 6th October 2021.