Development Update

Overview

  • The development pipeline is a key driver of the Fund’s portfolio enhancement strategy with a focus on year one cash returns

Project Completions

  • Peninsula Home in Victoria is now 100% occupied following the opening of Aldi, a discount chemist and café. The centre has seen an average traffic increase of 20% year-on-year since the project was completed in FY16
  • Tuggerah Super Centre in New South Wales is now 100% occupied and has seen an average traffic increase of 30% year-on-year since the revitalisation project was completed in FY16
  • The expansion of the Belrose Super Centre in New South Wales to add 2,263 sqm of retail GLA to the existing rooftop car park is complete and opened for trade in March 2017

Active Projects

  • Re-development of the former Bunnings tenancy at Sunshine Coast Home in Queensland
  • Construction of the first child care child facility in the portfolio at Cranbourne Home in Victoria

Artist impressions

Case Studies

Sunshine Coast Home

  • Key Outcomes
    • Valuation: $85m (23% net valuation gain since acquisition)*
    • The centre’s WALE has increased from 3.5 years at acquisition to 5.0 years
    • GLA (sqm): 27,000
    • Net income increase: 16% since acquisition**

    Development

    • Remixed 70%^ of the centre: 23 new leases executed (including the expansion of three existing tenants)
      •Expanded the tenancy mix: Eight new national retailers introduced (including Amart Furniture, Provincial Home Living, TK Maxx, Sheridan and a new food offering)
      •More than 80%^ of tenants have now completed store upgrades
      •Repositioning of the former Bunnings tenancy (7,700sqm): 100% pre-commitments from Amart Furniture, Sheridan and World Gym

     

*Includes acquisition cost and development spend

**Inclusive of three tenants currently under construction, due for completion 1Q18

^By store number; includes deals done during the period of management prior to acquisition

 

Belrose Super Centre

  • Leasing
    • The Fund successfully completed a major leasing program in 2016 resulting in the negotiation of new leases and lease extensions for 16 retailers representing 47% (17,100 sqm) of the centre’s GLA with positive leasing spreads and low incentives
    • The centre’s WALE has increased from 2.7 years as at Dec 15 to 4.5 years as at Dec 16, with major retailers Domayne/Harvey Norman and Freedom signing longer lease extensions
    • New categories introduced to the centre include baby products, toys and barbeques

    Development

    • Delivered a $6m expansion on time and budget adding 2,263 sqm of additional GLA pre-committed to national retailers Barbeques Galore and Focus on Furniture
    • Total centre approach has delivered material valuation gains to date resulting in a net valuation increase to $132.9m from $117.6m1 (+13.0%) as at 31 Dec 2015

    Acquisition

    • Acquired adjacent Belrose Gateway Centre in FY16 for $6.4m at an 8.14% cap rate in an off-market transaction to further control the retail precinct

    Asset Management

    • Management negotiated cost savings and synergies across a number of operations in the centre resulting in a reduction of retailer operating expenses by $0.2m per annum, boosting net property income

1. Includes acquisition cost and redevelopment spend

Tuggerah Super Centre

  • $11.2 centre revitalisation completed including external facade upgrades, mall refurbishment and separation of level one.
  • More than 50% of centre retailers have now completed internal and/or external store refurbishments to lift store presentation across the centre
  • National retailers have increase to $86% of the centre and average gross rents across the centre increased by 15% since acquisition.
  • Nine new leasing deals have been completed, including the expansion of two existing retailers
  • New categories introduced to the centre including government services, pet supplies, homewares and food operators
  • Total centre approach to development has delivered material valuation gains on completion resulting in a net valuation increase to $60.5m from $54.0m* (+12%)

*Includes acquisition cost and redevelopment spend