De Lutis pays Abacus $61m for Bacchus Marsh Village

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Melbourne, 27 April, 2018 – Melbourne property baron, Colin De Lutis, has purchased Abacus Property Group’s The Village Bacchus Marsh shopping centre, for $61.65 million on a 7 per cent yield following a hotly contested Expressions of Interest campaign managed by CBRE National Director, Mark Wizel.

The single level,16,000 square metre (GLA) centre, which Abacus purchased in July 2013, boasts more than 60 tenants and a very strong anchor tenancy profile including Coles, Aldi and Target Country, as well as a string of mini-majors with Kaisercraft, The Reject Shop, Anytime Fitness, Nova Pharmacy and The Elms Medical Centre.

The 4.39 hectare, central township, site has four street frontages, six access points and 714 parking spaces and was sold with a potential net income (fully leased) of circa $4.5 million. Coles has a 15 year lease, while Aldi, Nova, and Elms all have ten year terms, with options.

Mr Wizel, who managed the sale process with Director Retail Investments, Justin Dowers, said the campaign had attracted an extremely strong field of buyers including local, national and international interests.

“The popularity of shopping centre assets is growing as we move further into 2018 and the list of prospective buyers, including those who have missed the cut, if you like, with previous sales, grows with it.

“Part of that increasing demand comes despite fears about the negative impact of online trading with buyers now much more comfortable that a tenancy profile remix is capable of delivering a significantly better trading performance,’’ Mr Wizel said.

He said the favourite defensive asset status that retail had historically enjoyed was a further factor.

“A retail centre that can offer key non-discretionary spend tenancies such as major supermarket chains like Coles and Aldi and that can also offer pharmacies, medical centres, hair and beauty traders and other services, has the sort of tenancy profile more likely to negate the impact of online trading,’’ Mr Wizel said.

A significant property player in Melbourne with interests in apartments, offices, hotels, carparks, and industrial property, as well as several shopping centres, Mr De Lutis has plans to add value via a remix of tenancies with a focus on food, entertainment and services.

He said the centre’s key attributes included its location right in the middle one of Australia’s fastest growing regional housing markets and the lack of local competition.

“This is a significant asset with exceptional growth potential in one of Melbourne’s key growth corridors. It also offers substantial revenue upside through a tenancy remix which will reflect the market’s positive reaction to the potentially negative impact of online trading,’’ Mr De Lutis said.

He said the addition of another major national brand supermarket operator was an option, further enshrining the centre as the community focal point, which may be considered following a thorough review of the centre’s operations.

Bacchus Marsh, the largest town in the Moorabool Shire, has a catchment ranked in one of the top three of Australia’s regional housing markets suited for family living, with the population of Moorabool expected to grow by a massive 56 per cent from 34.030 in 2018 to 53,270 in 2041.

Chief Investment Officer and Head of Strategy for Abacus, Mr Steven Sewell, said the centre had performed in line with expectations following an increase in net income via a leasing and re-positioning strategy, but that following a portfolio review it had been decided to focus resources elsewhere.

The Bacchus Marsh divestment follows Abacus Property Group’s $93.5 million purchase of 452-484 Johnston Street, Abbotsford last month in an off-market deal brokered by Mr Wizel with Lewis Tong and Kiran Pillai.

By: JAGONAL