Haben buys Melbourne’s Casey Central for $225m as subregional centres soar

The deal is the largest subregional shopping centre sale of the year and shows the pandemic won’t slow the sector.

M&G is selling Casey Central to Haben and JY Group.

Property funds manager Haben and Asian outfit JY Group are again teaming up to buy a major retail asset with the pair securing Casey Central in Melbourne for $225m.

The centre is being offloaded by British investment giant M&G Real Estate and the sale, struck ahead of its near $221m purchase price, indicates that the sub­regional retail mall market is running hot.

The deal is Victoria’s largest subregional shopping centre sale in five years and shows that despite repeated lockdowns some areas of retail are surging.

More than $2bn in unsatisfied capital is “aggressively pursuing” retail centres that dominate their areas in growing suburbs, indicating more deals are to come.

The centre’s big attraction is its triple supermarket and Kmart-anchored town centre, and the bullish outcome bodes well as more retail assets hit the market.

M&G bought the Melbourne shopping centre in 2016 for close to $221m from listed heavyweight Scentre Group in what was that year’s biggest sub­regional retail mall deal.

Lachlan MacGillivray, head of retail investment services at Colliers International, brokered the deal, which showed a yield of about 5.4 per cent.

Mr MacGillivray said the sale brought the total volume of subregional transactions for the year to more than $1.2bn.

“It ticked all the boxes that astute investors were looking for in that it offered a secure tenant profile, limited required capital expenditure and is perfectly positioned to capture the future growth potential of the trade area.”

Prominently located in Narre Warren, the centre is anchored by Coles, Woolworths and ALDI alongside Kmart, with a very long major tenant-weighted average lease expiry of 14.4 years by income.

The mix is oriented towards non-discretionary and service-based retailers, with almost 60 per cent of the specialty space occupied by service, food catering and fast dining tenants.

Casey Central is considered one of the best quality town centres to hit the block since the pandemic struck and requires only limited required capital expenditure.

When Scentre owned Casey Central it spent $155m on transforming it into a new 28,760sq m shopping mall on a prime 10ha site.

Haben and JY have been active before and bought Stockland’s The Pines in Melbourne‘s Doncaster East earlier this year for $155m.

The Pines Shopping Centre is a triple supermarket anchored subregional centre which also includes Kmart, 84 speciality stores and 17 kiosks.

Haben also bought a Caloundra centre from Stockland for about $100m. The convenience-based shopping centre on Queensland’s Sunshine Coast has two strong anchors, Coles and Kmart, in addition to a mix of national branded specialty stores.

M&G Investments head of Australia, real estate, James MacKinnon, said Casey Central had shown “incredible resilience through a challenging last 12 months”.

Haben managing director Ben Finger said the company was “very focused on the long term growth fundamentals of the asset”.