Benowa Gardens shopping centre on Gold Coast sells to Brisbane fund for $40.3M

A Brisbane funds management company has made its first foray into the Gold Coast commercial property market.

A BRISBANE funds management company has made its first foray into the Gold Coast commercial property market with the $40.3 million purchase of the Benowa Gardens shopping centre.

IJ Capital, started three years ago by Scott Lai, plans a $2.5 million upgrade of the 30-year-old centre.

The seller is property major the Stockland group, which has owned the Coles-anchored property for 17 years.

Mr Lai yesterday said IJ Capital had bought the Stockland property trust which owned Benowa Gardens and was parking the centre in an unregistered managed fund.

He said the buy was at a 6.7 per cent yield based on the 90 per cent leased centre’s net income of $2.7 million.

ANZ bank was a previous tenant at Benowa Gardens.

The net income when the centre is fully let has been flagged as $3.33 million.

The 38-year-old Mr Lai said IJ Capital had revamp plans that included improving the centre’s main entrance and installing a travelator from the basement.

“Benowa Gardens has an excess of carparking so we might use some of the outside land for another drive-through food outlet.”

KFC is the only drive-through food outlet at the centre.

Mr Lai said IJ Capital hoped to attract a medical centre and a post office to the property and already was talking to Australia Post.

The group also wanted to ‘bring back the banks’, a move that would help the students in nearby schools.

Previous tenants at Benowa Gardens have included the ANZ, Bank of Queensland, and Suncorp Metway.

The IJ Capital buy is the second Benowa shopping centre to change hands for more than $40 million — Chinese buyers picked up the Coles-built Benowa Village centre for $49.5 million in late 2017 on a yield of 5.08 per cent.

Coles, in the wake of IJ Capital’s decision to spend $2.5 million upgrading Benowa Gardens, extended its lease from three years to 12.

That put the weighted average lease expiry term for the centre, which has 38 speciality tenancies, at 6.7 years.

The centre, built by a New Zealand group on a 1.77ha site with three street frontages, has a floor area of 5856sq m and parking for 384 cars.

It was bought by West Australian entrepreneur Danny Hill for $15 million in 1993 and sold three years later for $13.6 million.

Stockland acquired Benowa Gardens in 2003 as part of a $112 million three-centre purchase and in 2006 moved it to a trustee company at $25.2 million.

New owner IJ Capital has more than $100 million in funds under management and offers investors six different funds that include renewable energy, aged-care, and fintech.

Benowa Gardens was put on the market last year in an expressions of interest campaign run by Jon and Peter Tyson, Savills Brisbane.