Bond strikes with Perth shopping centre deal

The Bond family is again back in the property lights as the newest generation carves out a path in the sector with a $75m deal.

The large format retail sector is showing signs of life with Alan Bond’s grandson, Banjo Bond, finalising a deal to buy a centre in Perth for around $74.8m, as investors pick out resilient areas of property.

The deal is being struck by his Sydney-based real estate scion’s company, PWD, which has made a series of well-timed development and investment plays.

Mr Bond, a founding director of PWD, had a career as a real estate executive before striking out with colleague Rob Thomas to set up the private operation.

They set up a new unlisted fund to buy the centre, HomeCo Midland, in Perth’s northwest, from the listed HomeCo Daily Needs REIT.

“This is an irreplaceable asset located on a large land holding near major road infrastructure, with income underpinned by major national tenants. The investment proposition is highly compelling, with retail trade in WA remaining the most robust in the country,” Mr Bond said.

The young entrepreneur has specialised in property development and syndicating property investments, operating separately from his father, John Bond, who co-founded the well-regarded Primewest, and his late grandfather’s legacy.

Alan Bond’s grandson, Banjo Bond, has finalised a deal to buy a centre in Perth for around $74.8m, as investors pick out resilient areas of property.

PWD co-founder Rob Thomas was also bullish about the centre’s prospects. “With significant barriers to entry for new product in Perth, we look forward to strong trading growth in this centre supported by major population increases forecast in nearby growth centres,” he said.

The centre comprises about 23,400sq m of lettable area and direct at-grade carparking. JLL’s Nick Willis and Sam Hatcher jointly with Vend Property’s Jeff Klopper handled the sale.

In a year of record low investment supply across capital markets, large format assets have been one of the most thinly traded asset classes in the retail sector. Volumes for retail transactions in the first half of 2023 halved on the same period last year, and with only 30 deals, this year’s first half was the lowest on record.

Mr Willis cited the robust performance of large format retailers and the strong underlying fundamentals of land rich sites. He said they were almost irreplaceable given the rise in construction costs.

“We are continuing to see demand from well-capitalised parties able to transact. However, amassing portfolios of scale is difficult with investment supply of institutional-grade assets tightly held, as the majority of the market is controlled by a handful of players,” he said.

Mr Hatcher said that both the Western Australian and broader national large format retail market was tightly held by big players, including HomeCo’s Daily Needs REIT and Harvey Norman.

Large format retail is being chased in the wake of the pandemic as they house a well diversified tenant base and higher quality tenants due to industry consolidation, with national chains now common.

The cyclical surge in retail spending on household goods driven by home renovations has prompted a 24 per cent jump in sales in the area since the start of 2020.

Other deals in the area include the sale of HomeCo Epping in Melbourne, which Forza Capital bought for $70.25m and Rothwell Central, in Queensland, that was acquired by OzProp Holdings for $41m.

Originally published as Bond strikes with Perth shopping centre deal