Allenstown Square sale to Exceed Capital: Open for investors

The sale also included 11,000 sqm of vacant land which could mean there is an expansion on the cards. Here’s how you can invest in the centre.

Allenstown Square, taken in November 2022.

Investors are invited to buy their own slice of a Rockhampton shopping centre – with a price tag of at least $100,000.

Privately owned Brisbane-based investment company Exceed Capital entered a conditional contract to purchase Allenstown Square from Charter Hall Retail Trust on October 27, 2022.

The centre has a book value of about $58.8 million and capitalisation rate of 6.25 per cent.

Under the AT Property Trust, investors are offered a seven per cent first-year cash yield with a $100,000 minimum investment, seven year investment term and distributions are to be paid monthly.

The centre has a total net lettable area of about 8,000 sqm with 339 car parks.

Exceed Capital is working with investors to raise capital to purchase the asset, which is anchored by Woolworths.

Managing director Vaughan Hayne said there were three weeks left for investors to get involved and there were a few spots left.

Among the group of investors, three are farmers from west of Rockhampton who were previously involved with other assets with Exceed Capital.

“We would love to give locals the opportunity to own part of their own local shopping centre,” Mr Hayne said.

Mr Hayne is confident they will reach their quota.

“We’ve never had to delay any of our acquisitions, we’ve always completed every transaction,” he said.

It will be the first asset in Central Queensland for Exceed Capital, as it currently has a portfolio of seven assets, the closest being a car dealership in Townsville and some other sites in Brisbane.

“We own a lot of retail assets across northern New South Wales and Queensland, we’ve got a portfolio of seven assets already,” Mr Hayne said.

“One thing we like is we love to be involved in the regional areas, physically being at the assets and making a difference in those areas.”

An attractive feature of the centre is that anchor tenant Woolworths is one of the best performing Woolworths stores in Australia, according to data from June 30, 2022.

Woolworths has been the Allenstown centre’s anchor tenant for more than 40 years and in 2019 it was reported the store employed 159 staff.

“Because of that, the specialties are very strong as well,” Mr Hayne said.

Alongside Woolworths, 82 per cent of the leased tenants are national tenants, including The Reject Shop as a mini-major and Australia Post, Liquor Land, Optical Superstore, Connect Hearing, Prouds and more.

The shopping centre ownership change could also mean the development that has been promised for years on the now-vacant land surrounding the site could come to fruition.

Exceed Capital has also purchased the two adjoining land parcels of about 5000 sqm and 6000 sqm each.

“This is an exciting opportunity to further expand the centre’s footprint and presence within the catchment, and provide the opportunity for increased returns to investors,” the investment information reads.

The acquisition of the two land parcels are expected to have a delayed settlement of 12 months and Exceed Capital will use this time to consult with possible tenants on the best opportunities.

“We have been toying with a couple of different options at the moment, there are various different things we are working with,” Mr Hayne said.

“We are working with architects and planners at the moment and the community on the need for services that would complement the centre.

“The obvious ones are childcare, fast food, medical, even a discount department store.”

Between 2016 and 2019 Charter Hall bought 18 properties in the surrounding streets of Grant, Canning and Derby streets.

Properties marked with a cross were demolished or removed.

The Morning Bulletin calculated through real estate data the company had spent $5.495 million.

In 2019 the houses were either demolished or removed and sold on by Busby House Removals.

At the time, Charter Hall only confirmed they were preparing to lodge a development application in the coming months but never revealed any further.

No plans were submitted to council however; the COVID-19 pandemic did hit the following year.

The blocks of land remain vacant and the grass is mowed every couple of months.

Empty blocks beside Allenstown Square from Grant Street in 2019.

The last expansion at the shopping centre took place in 2013, when the $16 million extension that closed off part of Canning Street was carried out.

It took five years for Charter Hall to get planning approvals from Rockhampton Regional Council to carry out that street development.

Canning Street used to go straight through the centre to the back of the (now) Woolworths staff car park.

What Allenstown Square used to look like before extensions took place.

The extension was to the left of the centre, where The Reject Shop and doctor’s surgery now are.

It included 15 new stores with 2400 sqm of retail space and expanded the car park.

Woolworths and the existing centre were also refurbished at the time.

 

If successful, settlement of Allenstown Square is due to take place in mid-January.

Mr Hayne said customers shouldn’t expect too much change to start with, but they initially planned to clean up the centre and refresh the paint.

Their next focus would be leasing the vacant stores.

Across Exceed Capital’s portfolio of seven assets and several hundred tenants, they have a fewer than 1.5 per cent vacancy rate.

“We are very active in leasing up vacant tenants because it helps everyone the less vacancies there are,” Mr Hayne said.

“We would get stuck in and get involved with the leasing, there’s a few tenants that have been vacant for a while now.”