Hinkler Central Shopping Centre sells for $107 million

Bundaberg’s largest shopping centre has been sold for an eye-watering price to boutique fund managers Parkstone Funds Management.

An aerial of Hinkler Central which was acquired by Centennial, in partnership with Parkstone Funds Management for $107 million.

Boutique fund managers Centennial and Parkstone Funds Management have acquired Hinkler Central shopping centre, the largest retail centre in Bundaberg, for $107 million in a yield-driven acquisition that the partners say could lead to expansion of the centre.

Hinkler Central, described as one of Australia’s 10 best-performing retail centres of its class, has been acquired from QIC which paid $110 million for it in 2015.

The news broke on Wednesday afternoon, January 31, with fund managers acquiring the centre on what was reported as a “yield-driven acquisition”.

Despite the fact the centre was last sold in by Mirvac for $110 million QIC, a government-owned corporation, Parkstone Funds Management claims the deal was done at 30 per cent below replacement cost following extensive due diligence by the joint-venture partners.

Centennial executive director and CEO Paul Ford spoke on the purchase and said the high-performing centre purchase aligned with the company's strategic vision.

“We are delighted to be participating in the acquisition of such a high-quality investment that offers a very attractive distribution yield while comprising quite defensive characteristics,” he said.

The sale looks to solidify previous negotiations reported on in November of 2023.

Hinkler Central shopping mall, Bundaberg.

Parkstone managing director Tim Wilkin said the shopping centre’s occupancy rate and central location were key factors in the deal.

“The acquisition of the Hinkler Shopping Centre significantly bolsters our group’s exposure to sub-regional centres while further enhancing our portfolio’s overall quality and diversification,” he said.

“The strength of the Bundaberg region and this 21,000 square metre centre is exceptional.

“It has an occupancy of 99 per cent, of which about 94 per cent of gross lettable area is national retailers.

“There also exists further opportunity to enhance the centre in terms of development, which when combined with the ability to access positive rental reversion, should be well supported by the substantial government infrastructure spending currently in progress and planned for Bundaberg, aligning very well with the forecast investment horizon for this asset.”

The centre is anchored by Woolworths, Kmart and Coles, and is located in Maryborough Street on the edge of Bundaberg’s CBD and is supported by 65 retail and dining outlets.

The deal between the two companies was brokered by Sam Hatcher and Jacob Swan of JLL.

Centennial CEO Adrian Taylor said the partnership represented a shift for the two companies towards off-market opportunities and major retail centres.

“The acquisition underlines Parkstone’s and Centennial’s proactive approach to seizing off-market opportunities with similar characteristics in the market,” he said.

“This is the first of what we anticipate will be a broader partnership that will position us as a major player at scale in this space.”