Home Consortium carves off Masters in $200 million deal
The privately-owned Home Consortium will step up its redevelopment of the former Masters stores portfolio after carving off a smaller group and selling them into the Charter Hall platform.
The mini-portfolio comprises six freehold stores – three in Western Australia, two in New South Wales and one in Queensland. All are leased to Bunnings.
The deal was struck around $200 million and includes one development site in NSW.
The stores were all leased to Bunnings after Home Consortium took control of the large former Masters store portfolio it acquired from Woolworths.
Those long-term leases to Bunnings will have added value to the stores, enabling its new owner to recycle capital into an ambitious development pipeline.
Bunnings itself had begun eyeing off the Masters sites as Woolworths gave up on its ambition for its own hardware chain.
At one stage last year, as Woolworths looked to divest its Masters real estate, it is thought Bunnings and Charter Hall mulled a joint offer.
Charter Hall has shown considerable interest in long-lease assets, including Bunnings-tenanted stores.
Last month the fund manager, led by David Harrison, bought a Bunnings Warehouse at Burnie in Tasmania for $21 million that will become one of the seed assets in a new unlisted fund.
It has an existing unlisted fund, the Long WALE Hardware Partnership, which has 16 properties worth about $700 million.
Under a $725 million deal inked last year, Home Consortium, led by former UBS investment banker David Di Pilla, took over 61 properties from the former Masters portfolio. The bulk of another 21 development sites included in the transaction went to retailer Spotlight.
The overall portfolio comprises more than 500,000 square metres of space and is about 80 per cent leased or under agreement.
Home Consortium aims to open the first 10 redeveloped centres by the end of this year. About $60 million to $80 million has been invested for the redevelopment of the first tranche of large-format centres.
Behind Home Consortium is a group of well-known retail rich-listers: Zac Fried and Morry Fraid, who own the Spotlight and Anaconda chains, along with the owners of Chemist Warehouse chain, Mario Verrocchi and Jack Gance.
In the consortium as well are the investors behind start-up aged care operator Aurrum, which Mr Di Pilla also leads, including Greg Hayes, Mary and Alex Shaw and top UBS executives Robbie Vanderzeil and Matthew Grounds.
