Dual acquisitions grow Primewest portfolio by $45 million

Written on the 27 November 2019 by Business News Australia

Dual acquisitions grow Primewest portfolio by $45 million

A Coffs Harbour shopping centre and a South Australian industrial property will grow recently-listed national property fund manager Primewest's portfolio by $45 million.

As announced this morning Primewest has acquired the Moonee Market Shopping Centre in Coffs Harbour for just over $30 million.

The centre, anchored by Coles, was acquired by Primewest's recently launched Diversified Income Trust No 4.

The acquisition of the Moonee Market Shopping Centre coincides with the acquisition of a modern, industrial logistics facility in South Australia for $14.9 million.

The property, purchased on a 17 year, sale and lease back basis to waste management group Mastec Australia, was acquired by Primewest's Industrial Income Trust No 3.

Primewest director John Bond says that with the acquisition of Moonee Market the Diversified Income Trust No 4 had already raised an initial $21.5 million, with plans to acquire up to $100 million of assets over the next 12 months.

Bond says the Industrial Income Trust No 3 was also forecast to provide a 7 per cent return on investment, with its first two assets, including the latest in South Australia, both 100% occupied with a combined WALE by income in excess of 13 years.

"Moonee Market is a dominant, high quality centre with an excellent mix of convenience specialty retailers and health and lifestyle tenants, all supported by a strong performing Coles supermarket with over 50% of the income paid by national tenants," says Bond.

"The 10,751 square metre centre was fully refurbished in 2018 and we are purchasing it at approximately 20 per cent below replacement cost.

"It is situated in a large and affluent catchment area with strong anticipated population growth."

Primewest has no plans to slow down anytime soon, with the company intending to target further high-quality properties for the new trust on yields typically ranging from 6-8 per cent and providing diversity by sector, tenant and location, as well as capital appreciation.

Primewest director David Schwartz says Industrial Income Trust No 3 will continue to seek out quality assets and was increasingly confident in the future of all industrial and logistics markets nationally, as they are set to benefit from Australia's growing exposure to on-line retailing and e-commerce.

"Our Industrial Income Trust No 3 will again meet Primewest's core criteria of stable income, solid capital growth and value add opportunities," says Schwartz.

"The Mastec property is fully sprinklered and has the ability to be split into two tenancies or further expanded with only 28 per cent of the 3.9-hectare site currently occupied."

Perth-based Primewest only recently listed on the ASX earlier this month following an oversubscribed $100 million initial public offering from existing investors and institutions.

Primewest has been in operation for 24 years and now has more than $3.9 billion in assets across 75 funds in seven asset classes.

The group currently has 31 staff across its Perth headquarters and Sydney office. Its portfolio is comprised of 39 per cent commercial, 24 per cent large format retail, 21 per cent convenience and 10 per cent industrial.

Almost 60 per cent of the value of Primewest's properties is in WA, followed by QLD (12.9 per cent), NSW (12.8 per cent), VIC & TAS (9.4 per cent), SA (3.2 per cent) and California (2.4 per cent).

The company's most valuable property is Exchange Tower in the Perth CBD at $320 million, while other major assets include 1 William Street (Perth), Primewest Auburn (Sydney) and Australia Place (Perth). These properties combined make up for almost a fifth of Primewest's portfolio.

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