Lendlease has sold its CS Square shopping centre in Melbourne's north-west just days after it was revealed the neighbouring large-format-retail centre Watergardens had changed hands for $97 million.
CS Square was bought by private investor Colin DeLutis’ DeGroup in a $136.5-million deal. It was sold by the Lendlease-managed Australian Prime Property Fund Retail (APPF Retail).
CS Square is a 25,308sq m centre, with three supermarkets and a discount department store, in the Caroline Springs Town Centre, about 20km from the Melbourne CBD.
DeGroup chairman Colin DeLutis said CS Square was an asset with growth potential in one of Melbourne’s key growth areas.
“We have been following the performance of CS Square for a long time and feel that it is a perfect fit for our high-quality portfolio of convenience and service-focused centres,” DeLutis said.
“We also see a major opportunity to take advantage of the current market dislocation in pricing between sub-regional yields and bond rates, which we expect to continue for some time to come.”
The sale includes CS Commercial, a 1603 sq m mixed-use precinct opposite CS Square, and 1.28ha of vacant land in two separate lots. The centre underwent its most recent expansion in 2019.
The sale comes after retailer Harvey Norman purchased the large-format-retail centre Watergardens from QIC Global Real Estate for $97 million in nearby Taylors Lake, which was announced on Tuesday. That deal was struck on a low 4.75 per cent yield.
APPF Retail Fund Manager Anne MacSporran said the divestment of CS Square represented a “strong result for investors, especially in light of recent market conditions”.
“The outlook for Australian retail remains positive with sales stabilising post-pandemic,” she said.
Established in 1989, the Lendlease-managed fund is a core wholesale unlisted property trust. It holds investments in malls including Macarthur Square in south-west Sydney, Lakeside Joondalup in Perth and Melbourne’s Craigieburn Central.
Lachlan MacGillivray of Colliers International and Carl Molony of Stonebridge Property Group managed the sale.