SCA goes shopping in Mt Isa
SCA Property Group has beefed up its holding in regional Australia after buying the Coles and Kmart-anchored Mount Isa Village mall for $44.2 million from an ISPT fund.
Under the deal, struck on an initial yield of 7.34 per cent, SCA takes ownership of the only major shopping centre in the remote northern Queensland mining town and the only one with air-conditioning.
Mt Isa is more than 1800 kilometres by road from Brisbane and about 900 kilometres from Townsville.
“We’ve bought a good solid asset on a good solid yield,” said SCA chief executive officer Anthony Mellowes.
“It’s the dominant shopping centre in a good regional hub with a really strong-performing Coles and Kmart.
“We manage quite a few malls in regional locations and see an opportunity to improve the tenancy mix at Mt Isa Village,” Mr Mellowes said.
The sub-regional mall offers 9685 square metres of gross lettable area and 274 carparks on a near 2-hectare site.
Alongside the two anchors, there are 19 specialty stores and two kiosks. The mall sold with a weighted average lease expiry (WALE) of over eight years. Seventy per cent of the centre’s income comes from Coles and Kmart.
Jacob Swan, Sam Hatcher and Nick Willis from JLL brokered the sale of Mt Isa Village.
Mr Swan said the sale process for Mt Isa Village attracted significant attention from institutional investors, syndicators and privateinvestors.
“This level of interest in a regionally located sub-regional asset underlines the renewed positive sentiment in the market for strongly performing retail centres, irrespective of geographical location,” he said.
The deal adds to the growing appetite for regional neighbourhood malls after Sentinel Property Group paid just over $28 million for Moranbah Fair in Moranbah, another Queensland mining town.
In March, a private investor paid $38 million for the Woolworths-anchored Bellarine Village Shopping Centre near Geelong.
Neighbourhood malls, large-format retail centres and single-tenant assets like Bunnings warehouses – all of which are anchored by convenience retailers – are highly sought after by institutional investors and private investors. These assets accounted for 70 per cent of all retail property sales in the first quarter of the year, according to JLL.
By contrast the larger malls with a high proportion of discretionary retailers are proving much harder to sell and when they do transact are selling at hefty discounts to their book value due to the impact of online shopping.
Previously called Kmart Plaza, the mall was acquired by ISPT’s $1 billion IRAPT fund as part of a Coles portfolio deal.
ISPT acquired the mall in 2013 and renovated it the following year, renaming it Mount Isa Village.
