Stockland Bundaberg. Source: CBRE
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  • The Stockland Bundaberg sub-regional shopping mall in Queensland has been sold for $140 million to MA Financial Group
  • MA Financial plans to buy the centre, which it will rename Sugarland Plaza, through a new managed fund presently available to wholesale investors
  • CBRE’s Simon Rooney says investors are shifting their focus to high quality sub-regional shopping centres oriented towards non-discretionary spending
  • Stockland bought Stockland Bundaberg in two separate 50 per cent purchases in 2014 and 2016
  • Stockland (SGP) is trading down 0.64 per cent at $4.63 at 1:07 pm AEST

The Stockland Bundaberg sub-regional shopping mall in Queensland has been sold for $140 million to MA Financial Group, previously Moelis Australia, amid increased investor interest in premium retail properties.

It is MA Financial’s most recent retail acquisition, following the purchase of a 50 per cent interest in Westfield Marion in 2019.

RetPro Group, a specialist retail property services business, was also purchased by the group earlier this year.

MA Financial plans to acquire the centre, which will be renamed Sugarland Plaza, through a new managed fund that is presently available to wholesale investors.

MA Financial managing director and portfolio manager Richard Germain said the centre was a highly attractive institutional quality asset with strong ties to the local Bundaberg community.

“Our conviction in the centre is underpinned by its robust fundamentals including high exposure to non-discretionary spend and service-based retailers, well above-average speciality productivity and very low occupancy costs,” he said.

“We look forward to continuing to enhance the strength of the centre and delivering the community and our investors increased value. We certainly are seeing strong investor demand for this product, particularly given the strong prices achieved on some sub-regional assets that have transacted since we agreed this acquisition.”

CBRE head of retail capital markets – Pacific, Simon Rooney, negotiated the off-market deal on behalf of Stockland, with the selling price reflecting a 6.75 per cent core capitalisation rate.

Stockland bought Stockland Bundaberg in two separate 50 per cent purchases in 2014 and 2016.

Mr Rooney said the outcome of the sale is the result of a limited supply of high-quality retail with an increasing capital allocation to retail as an asset class.

“With neighbourhood and freestanding retail assets selling at record pricing levels, investors are shifting their focus to high quality sub-regional shopping centres oriented towards non-discretionary spending,” he said.

“This market segment has performed well during the dislocation caused by the pandemic, demonstrating net operating income stability and transparent income growth.”

The strong level of demand for CS Square in Melbourne, which was recently sold by APPF Retail to the DeLutis Family for $136.5 million at a cap rate of 6.25 percent, demonstrated this transition, according to Mr Rooney.

“While private investors and syndicates are spearheading buyer interest in the sub-regional sector, the appetite from institutional investors is also increasing given the achievable returns,” he said.

Stockland (SGP) was trading down 0.64 per cent at $4.63 at 1:07 pm AEST.

SGP by the numbers
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