Shopping Centre Sale Paves Way for Centennial Retail Play

The sale of a regional Queensland shopping centre has cleared the way for investment manager Centennial to expand into the regional retail and large format retail sectors.

In March, Centennial, in partnership with Parkstone Funds Management, paid $107 million for Bundaberg’s largest shopping centre—Hinkler Central.

As part of the sale of the centre, which was sold by the Queensland government’s investment arm, QIC, Centennial has acquired an equity interest in Parkstone with the right to increase over time, plus board representation.

Parkstone has about $240 million in funds under management across six neighbourhood supermarket-anchored centres in South Australia and regional New South Wales.

Centennial’s portfolio of funds under management now nudges $2.1 billion and comprises 85 assets across urban/last mile industrial and logistics, commercial and boutique residential property.

The acquisition of Hinkler Central came at a time when the sector was beginning to experience a resurgence in the demand for dominant centres offering healthy yields for investors, Centennial said.

The company said the centre’s gross lettable area and moving annual turnover metrics position it among the top 10 centres nationally in its class.

Centennial executive director Paul Ford said the acquisition was the first of what they anticipated would be a broader partnership with Parkstone “that will position us as a major player at scale in this space”.

The tactical move marked a major milestone for Parkstone Funds Management and Centennial in further strengthening their presence in the retail property sector, Centennial said.

“It has allowed Parkstone to tap into Centennial’s extensive funds management experience and well-established investment platform, while Centennial has leveraged Parkstone’s deep expertise in the retail property sector.”

Hinkler Central Shopping has a 99 per cent occupancy and is anchored by Woolworths, Kmart and Coles with another 65 retail and dining spaces, and more than 1000 mostly undercover parking bays.

The centre is in Queensland’s second-fastest growing city, 360km north of Brisbane, that has a 7.1 per cent economic growth rate and has been nominated as No.1 for region-to-region relocations.