7 December 2023
Investor appetite for high quality properties continues to be in demand with leading property funds manager, MPG Funds Management, announcing the acquisition of four new retail and Government properties for $42.7 million, which brings MPG’s total assets under management to over $1.05 billion.
The deals comprise an Aldi supermarket in West Melbourne (VIC) secured for $14.4 million, a Victorian Government property in Sunshine (VIC) secured for $14.3 million, a Bunnings Warehouse in Young (NSW) for $10.5 million, and a retail shop in Moss Vale (NSW) for $3.5 million.
The Aldi West Melbourne property, purchased on a yield of 5.47% occupies the ground floor (1,595 sqm) of a luxurious strata titled residential development and is leased to Aldi for a 14 year term.
The deal was negotiated by Colliers’ Tim McIntosh in conjunction with Stonebridge’s Justin Dowers, Rorey James and Kevin Tong.
Director of Retail Middle Markets at Colliers, Tim McIntosh, said “Supermarket investments remain at the top of retail investors’ wish list, motivated by inflation-led superior returns and high conviction in tenant longevity beyond initial terms”.
The Sunshine property, purchased on a yield of 6.25% is a newly constructed strata office building with part of the ground floor and first floor area of 2,127 sqm leased to the Victorian Government (Orange Door) for an eight year term, and is located in Sunshine, Victoria.
The Sunshine deal was negotiated by Marc Leiba of Leiba Commercial who said “Government anchored properties on long term leases are proving to be a very popular asset class with investors due to the security associated with the lease and quality of the buildings the tenant occupies”.
The Bunnings Young property occupies a strategic 11,530sqm site in the retail core of Young, a strong regional town situated between Sydney and Canberra. The 5,530sqm purpose-built property is secured on a lease to Bunnings until 2030.
The off-market sale of the Bunnings property was brokered by JLL’s Stuart Taylor, David Mahood and Sebastian Fahey.
Mr Taylor said “Transactions volumes of Bunnings leased assets have been subdued this year, however it is clear that Bunnings are still regarded as one of the most sought-after covenants in the retail sector from a range of capital sources”.
The Moss Vale property consisting of ten specialty office/retailers was purchased on a yield of 6.25%. The deal was negotiated by Jonathan Fox of Stonebridge.
The Aldi West Melbourne and Bunnings Young properties were purchased on behalf of the MPG BW Trust, an existing owner of multiple Bunnings assets.
The Sunshine Office property was purchased in the MPG Essential Services Property Trust, an Unlisted Property Trust that has grown to include $230 million of essential service and social infrastructure properties.
MPG Managing Director, Brett Gorman, said “The acquisitions are in line with our strategy to acquire secure investments that fit our existing high-quality portfolio. We will continue to be selective, however, we are seeing good buying opportunity present itself in the current market that provide attractive rental growth and long-term security to national branded and government tenants”.
The MPG Essential Services Property Trust’s newest acquisition in Sunshine.
MPG BW Trust new acquisition in West Melbourne, Vic
MPG BW Trust new acquisition in Young, NSW