Primewest offloads five shopping centres for $180m

Centuria Capital Group (ASX: CNI) subsidiary Primewest has announced the sale of five neighbourhood shopping centres in South Australia, Queensland and Western Australia to SCA Property Group (ASX: SCP) for $180 million, representing a 24.1 per cent premium to book value.

The sale was made on behalf of two unlisted wholesale funds, and will generate a $5.7 million performance fee for the group.

Brassall Shopping Centre in Ipswich (QLD) garnered the highest transaction value within the sale at $46.5 million, closely followed by Dernancourt Shopping Centre (SA) at $46 million, while the highest premium to book value was 34.4 per cent for Fairview Green Shopping Centre (SA) at $39.5 million.

The other two assets sold were Port Village Shopping Centre in Port Douglas (QLD) for $36 million and Tyne Square Shopping Centre in Northbridge (WA) for $12 million.

The Fairview Park centre was part of a single-asset fund, with the remaining four properties held by the Primewest Retail Trust (PWRT).

The announcement comes less than a year after a merger was completed between Primewest - founded by John Bond, Jim Litis and David Schwartz, and listed on the ASX in late 2019 - and Centuria, combining $15.5 billion worth of assets under the one roof. 

"These daily needs retail neighbourhood shopping centres have proved resilient throughout the past few years as local communities continued to rely on the supermarket anchored centres for their non-discretionary shopping," says Centuria joint CEO Jason Huljich.

"Both funds have been held for long-term periods and the sales provide compelling returns for our investors."

SCA, which stands for Shopping Centres Australasia, prospered throughout the pandemic with a business model built on community retail centres anchored by the likes of tenants such as Woolworths, Coles, Aldi, Kmart, Big W and Target.

With these five new properties, SCA will own and manage more than $4.6 billion of convenience-based shopping centres, reinforcing its position as a leading retail specialist in Australia.

The buyer notes the acquisitions are expected to settle in early July, funded by existing undrawn bank facilities. 

SCA expects to add value to the acquisition portfolio through its active asset management and leasing capabilities, and notes the assets represent a weighted average fully let yield of six per cent.

The company plans to enter into an underwriting agreement with MA Moelis Australia Advisory to underwrite a dividend reinvestment plan (DRP) take-up rate of 50 per cent of the total final June 2022 distribution.