Aventus Property Group has bought a AUD220m (€143m) retail property portfolio as Blackstone continues to recycle assets from its AUD3.7bn Australian real estate portfolio.
Listed Australian company Aventus paid a premium to secure the three home improvement centres situated in three different states.
The assets were part of the large Valad Property Group, recently renamed 151 Property Group, which US private equity group Blackstone acquired some five years ago for AUD860m.
Market sources and agents said Blackstone was capitalising on the demand and rising value of this type of real estate.
Australia’s so-called ’homemaker centre’ sector has been undergoing rapid growth, in part due to Australia’s strong housing market.
The five centres, location in NSW, Victoria and Queensland, were sold on an average yield of 7.38%. When Blackstone first started buying in the sector, yields ranged between 8.5% and 11.5%, with a median rate of 9.6%, compared with the 10-year average of 8.78%.
Aventus, which specialises in large-format retail centres, has been prepared to accept lower yields to clinch the deal in the face of stiff competition in the belief the sector is poised for further growth and cap rate compression.
The company sees itself as the largest “pure” landlord in large format retail in Australia, controlling 10-11% of the entire market.
Aventus chief executive Darren Holland believes that relative to the global market for bulky goods centres, the Australian market has room to grow further.
Blackstone has been astute in taking profits as it recycles assets in Australia. Among is most notable sale was Gold Fields House in Sydney Circular Quay, which offers panoramic views of the iconic Sydney Opera House and the Sydney Harbour Bridge, to Chinese developer Dalian Wanda for AUD415 million last year. The sale price remains a record for a single office building in Australia.
In March, Blackstone sold an office tower at 151 Castlereagh Street in Sydney CBD to Deutsche Asset Management for AUD120m.
The property at 151 Castlereagh Street was one of the very first assets that Blackstone bought in Australia before it acquired the Valad Group. As its sells assets, Blackstone is positioned to double its portfolio in Australia over the next three to five years.
This year alone, Blackstone has acquired an AUD400m shopping mall in Adelaide and believed to be chasing an AUD900m-plus shopping centre portfolio, currently being sold by the listed retail trust, Vicinity Centres Group.