Smithfield centre to trade for $140m as Lendlease reels in buyer

Private fund managers are making the running as the retail property market resets.

The shops market is showing more signs of life with Smithfield Shopping Centre in Far North Queensland the latest deal to be struck, with Alceon and CPRAM Investments buying the $140m property.

The sale, being struck by manager Lendlease on behalf of a mandate client, would show that yields on major centres at about the 7.5 per cent mark.

The shift in values reflects higher interest rates and also the new hierarchy of centres, where even the convenience-based malls that are now the most sought-after are selling at discounts to previous values.

Small funds managers have been the most aggressive buyers of shopping centres for some years, and are now buying at rates that allow their funds to produce “value-add” returns in order to attract investors.

The involvement of Sydney-based Alceon and CPRAM on the buy side also shows experienced retail hands are back purchasing due to the value on offer.

One player said once-dormant managers were returning to the market as it showed promise. But their presence and the levels at which they are striking deals has put valuers under pressure as they write up June 30 valuations for retail landlords, with more falls expected.

The private CPRAM Investments, run by Olivier Sicouri, is known for its tie-up with financier and property fund manager Alceon Group in which the pair overhauled and sold a series of shopping centres in Queensland.

The sale is being brokered by JLL’s Sam Hatcher and Nick Willis and Stonebridge Property Group’s Carl Molony, on behalf of the Lendlease investment mandate, but they and the parties declined to comment.

The subregional centre is on a substantial 12.4ha site, and is anchored by Coles, Woolworths, Kmart, and Event Cinemas. It is supported by six mini-majors including a Dan Murphy’s and more than 90 specialty tenants, and sports an attractive weighted average lease expiry of five years by income.

The centre generates more than $200m per annum in major tenant sales and is the most productive shopping centre in Cairns. The subregional centre captures a dominant share of local and passing trade.

Investors have been drawn to Queensland due to strong interstate migration in the short term, which is driving population growth.