The GPT Wholesale Shopping Centre Fund (GWSCF) bought the stake from the Canada Pension Plan Investment Board. Northland Shopping Centre is co-owned by CFS Retail Property Trust Group. The transaction represents an initial yield of 6.1 per cent and a core capitalisation rate of 5.8 per cent.
The super regional centre boasts major tenants including Myer, Kmart, Target, Coles, Woolworths, JB Hi-Fi, Country Road, and Hoyts cinemas and includes more than 300 specialty stores. Northland has the sixth highest moving annual turnover among retail centres in Melbourne.
Michelle Tierney, GWSCF fund manager, said the addition of Northland Shopping Centre delivers a number of benefits to the fund and is consistent with the strategy to own a diverse portfolio of dynamic retail assets that can continue to connect, evolve, and grow with their communities.
“The acquisition improves the quality of the GWSCF portfolio, provides increased long term returns and reduces overall fund risk through further diversification of asset exposure. The acquisition corresponds with a period of seven consecutive months of accelerating retail sales growth in the sector supported by the low interest rate environment, a recovery in the housing market and improving business sentiment,” said Tierney.
The acquisition is due to settle on 30 April 2014.