Charter Hall checks out Corio centre in $145m play

Big institutions are getting back into the shopping centre market and they are chasing assets that have been revamped by active players.

The “eatertainary” area at Corio Village. Picture: Brad Fleet

Property funds manager Charter Hall is circling the Corio Village shopping centre in the suburbs of the Victorian city of Geelong in a deal worth about $145m.

The move on the centre would signal both Charter Hall’s belief in the retail property and the broader recovery in the sector, which is now more competitive as large institutions return to buying.

The centre last traded in 2019 when it was picked up for $101m by Melbourne property house IP Generation as listed retail property company Vicinity Centres sold out.

The company took the dominant northern Geelong complex anchored by Kmart, Coles and Woolworths and revamped it into a property focused on local markets and convenience.

JLL’s Nick Willis and Sam Hatcher are handling the deal but they and the parties declined to comment.

Charter Hall has been an active retail buyer. Its listed trust, Charter Hall Retail REIT teamed up with wholesale capital partner, superannuation fund Hostplus, to take pub landlord Hotel Property Investments private.

Corio Central, in the suburbs of Geelong in Victoria. Picture: Alison Wynd

It also took a 50 per cent stake in convenience shopping centre Glebe Hill Village, Hobart, which sold to the group’s RP1 fund for $50.3m. The trust bought Ampol Marsden Park in Sydney for $21m and the Cecil Hotel in Southport, Queensland, for $14.3m, as well as the Harlow Pub in the Melbourne suburb of Richmond.

The listed fund has also been a seller. It sold off the Lake Macquarie Square in regional NSW to private developer Revelop for $122.5m, reflecting a 1.2 per cent premium on book value.

The sale of the revamped Geelong complex, which is on the approach to one of the country’s fastest-growing regional centres, would also prove up IP Generation’s strategy of buying assets, adding value and then exiting.

IP Generation works the assets it buys more intensively than larger institutions, partly as some are considered non-core when sold by their vendors, and also because of the managers focus on moving quickly to ensure high returns.

Upon acquiring the Corio centre in 2019, IP Generation kicked off a reinvigoration of the centre with the aim of repositioning it as a vibrant community hub – a place to shop, dine, as well as shop for daily needs. It filled up vacancies in the centre, winning custom by putting in a General Public entertainment centre and a Planet Fitness Gym.

IP Generation director Chris Lock has been keen on the area.

The firm also acquired the ex-Quiksilver headquarters at Torquay in a $15.2m deal in 2018 and completed a $13m development, including a flexible working space, microbrewery and wellbeing centre. IP Generation sold the complex, which again houses Quiksilver and Roxy, to a Melbourne-based family for just over $40m in 2002.

IP Generation has been active and this year finalised the purchase of the David Jones building in Melbourne’s Bourke Street for $223.5m. It also picked up a half stake in a Cranbourne shopping centre that was sold by funds house ISPT for $126.5m.