Melbourne Fund Pays $212m for Qld Retail Centre

Acquisitive Melbourne-based fund manager Fawkner Property has paid $212 million for Townsville’s Willows Shopping Centre.

It is the largest retail transaction of the year in Queensland, according to JLL.

The Townsville transaction boosts Fawkner’s total funds under management to more than $3 billion, with additional retail assets in the pipeline.

It follows a national retail buying spree, which has included Queensland acquisitions at Gladstone, Mackay and Cairns.

Fawkner Property founder Chris Garnaut said it was “a strategic acquisition, which extends our foothold in central and Far North Queensland and will allow us to capitalise on the synergies of owning a high-quality retail portfolio in a fast-growing market”.

“As interest rates potentially move into a stabilisation phase, private capital, which has dominated this investor space over the past two years, is moving quickly to secure high-quality, large retail assets at compelling returns as this window of opportunity begins to close.

“We have recently seen the re-entry of offshore and now domestic institutional investors into the sub-regional and regional shopping centre sector given the compelling returns on offer. This should translate into increased retail sale volumes as we close out 2024 and continue into 2025.”

Fawkner has been one of Australia’s most active acquirers of regional and sub-regional shopping centres in recent years.

▲ The property is the only triple supermarket centre in North Queensland.

The sale of Willows Shopping Centre was brokered on behalf of Dexus by Nick Willis and Sam Hatcher from JLL, and Jonathan Fox and Carl Molony from Stonebridge, following a formal expressions-of-interest campaign. The centre was owned by the Dexus Wholesale Property Fund and is managed by Dexus.

CBRE head of retail capital markets, Pacific, Simon Rooney acted on behalf of Fawkner Property to negotiate the transaction.

Hatcher said the sale came as transaction volumes for sub-regional Centres tracked at almost $1.2 billion for the year to date, trailing about 55 per cent below the three-year average annual volume for the sub-sector.

“The reduction in transaction volumes is being attributed to the limited availability of investment supply as fundamentals of the retail asset class continues to improve,” Hatcher said.

Since 2021, Fawkner has purchased 11 retail assets totalling $2.1 billion, including WA’s Midland Gate, Karratha City and The Square Mirrabooka; Stockland Traralgon in Victoria; Queensland’s Cairns Central, Mount Pleasant Centre, Stockland Cairns, and Stockland Gladstone; as well as NSW’s Settlement City at Port Macquarie and Stockland Nowra.

▲ The Townsville centre joins a slew of other Queenland regional retail assets in the Fawkner portfolio.

Willows Shopping Centre has a GLA of 44,507sq m on a high-profile 15.39ha site with an additional development land parcel of 4.42 hectares.

The centre is home to Townsville’s first and only Aldi and is the only triple-supermarket-anchored shopping centre in the city.

There has been a significant capital expenditure and development program at the centre in recent years, including a Woolworths and fresh food upgrade, and the successful leasing reconfiguration of the ex-Target box, which introduced Aldi, TK Maxx, and Planet Fitness.

Willows Shopping Centre is 11km south-east of the CBD and has a turnover of about $360 million (including Aldi estimates).