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FIRST RELEASE TICKETS ON SALE FOR URBANITY-25 THE UNMISSABLE EVENT FOR PROPERTY PROFESSIONALS IN THE ASIA PACIFIC
FIRST TICKETS ON SALE FOR URBANITY-25 UNMISSABLE FOR PROPERTY PROFESSIONALS
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RetailRenee McKeownFri 01 Mar 24

Vicinity Adds First Bunnings as Property Income Rises 20pc

The 13,000sq m hardware and garden operator opened at Colonnades Shopping Centre in South Australia, the first time Bunnings had been added to the ASX-listed Vicinity portfolio.

Retail giant Vicinity Centres is due to reach settlement across four properties this fortnight as it eyes a Bunnings Warehouse and other major retail redevelopments to build its portfolio. 

The 13,000sq m hardware and garden warehouse recently opened at the Colonnades Shopping Centre, South Australia, is the first Bunnings to be added to Vicinity’s portfolio.

It was part of Vicinity’s broader leasing strategy, the company said, with the Bunnings Warehouse building on the $272-million SA regional centre the company has a 50 per cent share in.

The ASX-listed company outlined its execution of investment strategy as part of its half yearly results that were released days after the Bunning was opened.

Vicinity’s funds from operations rose 24.1 per cent to $357.1 million, statutory profit fell 72.9 per cent to $176.3 million off the back of a property valuation loss of $109.2 million, and net property income rose 20.5 per cent.

The next major project for the portfolio will be at Chatswood Chase Sydney—Vicinity has purchased the remaining 49 per cent stake in the centre from GIC.

The $307-million deal is expected to settle on March 15 and a major redevelopment is slated for the centre.

And the divestment of Kurralta Central, also in SA; Roxburgh Village, Victoria; Dianella Plaza, WA; and a number of ancillary properties at a value of $315 million is expected imminently.

A woman walking along a rooftop terrace between offices at Chatswood Chase in the future.
▲ Chatswood Chase will deliver mixed-use benefits with a rooftop office workspace as part the next evolution of the centre.

The $680-million Chatswood Chase project will take 18 months to complete and includes a downsizing of David Jones, adding 8270sq m to luxury retailers, and a refurbishment of Coles.

There will also be a 9400sq m commercial rooftop added, with offices and landscaped terraces creating Chase Quarter.

The uncertainity of the pandemic years is becoming a distant memory with occupancy in Vicinity’s portfolio up to 99.1 per cent.

However, the cost of living crisis has been blamed for negative sales growth in October, the first time since the pandemic.

Vicinity chief executive Peter Huddle said they were still seeing resilience across the portfolio and were focused on the long term.

“We are upweighting our portfolio to premium retail assets, such as Chatswood Chase, that offer superior long-term growth potential and enhanced value accretion opportunities,” Huddle said.

render of the future Chadstone Victoria mixed use development with a shopping centre and office tower at the same site.
▲ A render of The Chadstone, Victoria mixed-use project, which has an estimated yield of 5.5 per cent and IRR of 10 to 11 per cent.

Development of the One Middle Road office tower and redeveloped fresh food and dining precinct at Chadstone has also progressed. 

Stage 1 of The Chadstone redevelopment project opened in December and included Coles and Aldi, with an alfresco Asian dining precinct and market pavilion to open in the coming months.

The nine-level One Middle Road office tower offering 20,000sq m will be anchored by Adairs and has a total project cost of $250 million. 

“In an environment of elevated costs of capital and ongoing dislocation in construction markets nationally, we have naturally tightened our focus on capital deployment across our retail and mixed-use development pipeline,” Huddle said.

“Delivering project returns above our cost of capital remains a key priority and is enabled by intense derisking of projects from both an income and cost perspective.”

RetailAustraliado not useAdelaideMelbournePlanningPlanningDeal
AUTHOR
Renee McKeown
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Article originally posted at: https://theurbandeveloper.com/articles/vicinity-adds-bunnings-chatswood-chase-chadstone-future-plans