Newmark buys $135m mall from Vicinity, TelstraSuper

Property funds manager and developer Newmark Capital has snapped up a Melbourne shopping centre for $135m.

Brandon Park shopping centre has been sold for $135m.

Property funds manager and ­developer Newmark Capital has snapped up a suburban Melbourne shopping centre for $135 million from listed landlord Vicinity Centres and co-owner TelstraSuper.

The deal continues Vicinity’s push to sell non-core assets and focus on larger flagship malls, such as its half-owned Chadstone shopping centre, as the retail sector tackles headwinds such as cautious consumers and online shopping. Vicinity sold its half stake in Coffs Harbour’s Toormina Gardens in January and has agreed to sell about $109m of ­assets this financial year.

Vicinity said the deal was a 3.8 per cent premium to book value and the group will receive $67.5m from its half stake.

“We are pleased to continue to progress the divestment of our non-core assets,” Vicinity chief executive Grant Kelley said.

The 23,000sq m Brandon Park Shopping Centre is about 24km southeast of the Melbourne CBD and is anchored by Coles, Aldi and Kmart.

JLL’s head of retail investments for Australasia Simon Rooney was the agent on the transaction.

“Victorian retail assets are tightly held and are generally highly sought after given their relative scarcity, especially in metro locations,” Mr Rooney said. “Unlisted funds continue to be drawn to the subregional sector given attractive yields relative to premium core assets.

“Victoria is experiencing the strongest rate of population growth on record, and investors are attracted to the positive growth drivers underpinning the Melbourne retail market.”

Deal flow for subregional centres halved in 2017 to $1.1 billion, when compared with the $2.4bn per annum that sold ­between 2013 and 2016.