Stirling Property Funds’ Diversified Enhanced Yield Fund (Fund) has entered into a Contract to acquire MacGregor Home, a Large Format Retail Centre, 11 km south of Brisbane CBD from Aventus Group for $42.15m. Phil Gartland from Stonebridge introduced Stirling to the off-market opportunity.
The acquisition reflects a net initial yield of 6.0% with completion of the transaction to occur by 30 July 2021.
MacGregor Home is the third asset to be acquired by the Fund and follows the recent acquisition of two adjoining industrial assets located in Newcastle’s prime industrial location Mayfield West.
Matthew Hyder, CEO of Stirling Property Funds said Stirling Property Fund’s investment strategy is to invest in quality industrial, retail and office properties in high growth, regional and capital cities.
“Decentralisation, population growth and infrastructure investment is providing strong growth prospects for highly accessible regional cities and targeted markets within capital cities.
These long term demand drivers coupled with the return premium available from investing in these markets is providing compelling risk adjusted returns for investors.”
MacGregor Home is strategically located within Brisbane’s established commercial precinct of MacGregor. The Property has benefitted from an extensive capital expenditure program with in excess of $10m spent on the Property by Aventus since 2016.
MacGregor Home is the largest Large Format Retail Centre within MacGregor with 12,330 sqm of lettable area. National Large Format Retail tenants including The Good Guys, comprise 60% of the lettable area with a Weighted Average Lease Expiry of 6.3 years.
“The Large Format Retail sector has performed exceptionally strongly over the past twelve months despite the challenging broader retail environment,” said Mr Hyder, “ With very low online penetration rates within this segment of the retail market, coupled with robust house price growth, the Large Format Retail sector is expected to continue to deliver attractive, resilient investment returns.”
Stirling is positive on the medium term outlook for the Brisbane commercial real estate market. “Brisbane’s population grew by 1.9% in 2020 which was 72% greater than Sydney and 19% greater than Melbourne. With the uncertain outlook for overseas migration expected to continue, Brisbane is well placed to continue to benefit from net internal migration. Over 930,000 people have relocated to Queensland from other states in Australia since 1981,”said Mr Hyder.
The Fund has a FY22 target income distribution of 7.1%, distributable income growth of 3.2% and a 6.0 year WALE. Stirling will commence a capital raising program over the coming weeks to support the continued growth of the Fund.
For further information on the Fund or on Stirling Property Funds, please visit www.stirlingpropertyfunds.com.au or alternatively email email@example.com
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