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Property investment group Primewest (ASX: PWG) is beefing up its presence in the retail space with the $70 million acquisition of the newly completed Melbourne Square shopping centre.
The Perth-based company is adding the property to its "daily needs" property trust established earlier this year to target neighbourhood retail centres.
In recent years, Primewest has been averse to investing in pure retailing due to challenges facing the sector, prompting it to launch the daily needs fund to capitalise on tightening yields.
Melbourne Square is part of the Malaysia-based OSK group's master-planned mixed-use development on the corner of Kavanagh and Power Streets in Melbourne's Southbank.
The centre is anchored by a two-level Woolworths supermarket, the first full-line supermarket in the Southbank area and the first two-level major supermarket in Victoria. It is supported by a BWS liquor store, five specialty stores, a childcare centre and over 120 car spaces.
The off-market deal was negotiated by JLL's Stuart Taylor on behalf of Yarra Park City, the joint-venture partnership comprising OSK Group and EPF (Employees' Provident Fund) of India.
The transaction was struck on a yield of 4.73 per cent.
Primewest has over $4.6 billion of assets under management in Australia and the west coast of the US. It plans to grow that figure to $5.7 billion over the next 12 months.
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