Chris Garnaut’s funds house Fawkner Property continued its ascent by finalising a deal to buy Willows Shopping Centre in Townsville from a fund run by the listed Dexus for $212m.
Fawkner, well known for moving fast, stood out among buyers this year, even as rivals Haben and IP Generation made their mark with big purchases. Listed groups followed suit, most notably, Westfield owner, the Scentre Group, which teamed with investment bank Barrenjoey to buy stakes in two centres it ran in Adelaide.
For Fawkner, the Townsville purchase took the value of its property empire to more than $3bn, with more retail plays in the pipeline as it becomes a force in property funds
at a time when many established managers are shrinking as investors exited. It swooped after a play for the centre, in which former Macquarie Bank property chief Bill Moss was playing a hand, did not go ahead.
Fawkner’s retail buying spree included 11 assets worth $2.1bn since 2021, and in Queensland alone, it bought in Gladstone, Mackay and Cairns. It was also active in Western Australia, where it bought Midland Gate shopping centre for $465m, with the backing of Hong Kong private equity and real estate house PAG. It comes during a retail reset, as shopping centre values plunged, however, pricing is now stabilising as institutions set their sights on larger assets.
The deal was struck at a yield of 7.4 per cent which Fawkner could lift to 8.4 per cent once it filled up vacant space.
Fawkner bought the asset – Townsville’s only centre with Woolworths, Coles, Aldi and Big W and about 140 specialty stores – from the Dexus Wholesale Property Fund in a deal brokered for Dexus by JLL’s Sam Hatcher and Nick Willis and Stonebridge’s Jonathan Fox and Carl Molony. CBRE’s Simon Rooney acted on behalf of Fawkner.
Mr Hatcher said the sale came as transaction volumes for subregional centres tracked at almost $1.2bn in 2024, well below average levels, mainly due to the lack of stock at a time when retail fundamentals were improving. Mr Willis pointed to an increase in capital demand for retail, with most investors now chasing subregional assets.
The next leg of the retail surge is to come as interest rates stabilise and private capital moves on the remaining large centres on the market, chasing compelling returns as the window of opportunity begins to close, Mr Rooney said.
Fawkner Property’s Mr Garnaut said the purchase was a “strategic acquisition, which extends our foothold in central and Far North Queensland and will allow us to capitalise on the synergies of owning a high-quality retail portfolio in a fast growing market”.
Mr Rooney added that offshore and now domestic institutional investors had re-entered the sub regional and regional shopping centre sector, given the compelling returns on offer, which should lift retail sale volumes this year and into 2025.
Fawkner has been one of Australia’s most active acquirers of regional and sub regional shopping centres in recent years and is now the one to watch in retail property.
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