National property investment group and developer, Centennial has acquired one of Brisbane’s premier inner-city waterfront retail precincts at Portside Wharf, Hamilton for $59.4m.
Purchased from Brookfield Asset Management and exclusively negotiated by CBRE’s James Douglas, Joe Tynan and Michael Hedger, the sale of the landmark retail asset went unconditional on March 28 and comprises a 100% interest in 68 retail tenancies offering a combined net lettable area of 13,731m2, plus 398 car spaces and a substantial “wet lease”.
Anchor tenants include national chains, Dendy Cinemas, Subway and IGA, plus a diversified tenancy mix spanning fine dining, entertainment, retail, services and allied health categories to reflect the precinct’s broad customer demographics comprising local residents, visitors and tourists.
Located within 7km of Brisbane’s CBD, the retail precinct is positioned in the heart of the thriving Portside Wharf residential enclave, that first opened in 2006 and now comprises around 2,000 apartments spread across a number of towers. An additional, 14,000 new dwellings are slated to open in the immediate area which forms part of the State Government’s Northshore Hamilton Priority Development Area (PDA).
The Hamilton Northshore PDA is gazetted as a major recreation, residential and tourism destination and is currently undergoing extensive transformation works.
Centennial’s Executive Director, Paul Ford said the company was delighted to secure such a unique institutional-grade, retail precinct with absolute water frontage which lends itself to multiple value-add and growth opportunities, with minimal capital expenditure required.
“The retail component currently delivers a net rental income of $4.2m, which reflects a 7.1% passing yield at 83% occupancy and a 11.4% yield when fully leased,” Ford said. “This is a premium asset offering a strong income and total return profile.
“This acquisition takes our retail exposure to circa $250m which aligns well with our medium-term goal of $1bn. After extensive research, we decided to lean into the retail sector about 12 months ago as it was and still is offering far superior risk adjusted returns, relative to other real estate sectors.”
Adrian Taylor, Centennial’s Managing Director & Group CEO added, “Brookfield completed an extensive multimillion dollar expansion and upgrade to the retail precinct in late 2024. This enables us to focus on executing an active leasing campaign and marketing strategy to build on the strong foundations Brookfield had established following the upgrades and strong population growth forecasts.
“The Portside Wharf Retail Trust is targeting annual average distributions of 9% and an internal rate of return of 17% over five years, which will be the focus of a new closed-ended $21m capital raising commencing in early April.”
Brookfield Co-Head of Australian Real Estate and Brookfield Properties President Danny Poljak said, “We are very proud of how our team has transformed Portside Wharf and contributed significantly to the revitalisation of the Hamilton area during nearly two decades of ownership and operation of this precinct.
“We have developed and sold close to 1,000 residential apartments at Portside Wharf, and most recently, we have completed the repositioning and expansion of the retail space, attracting a number of new retailers, to reinforce Portside Wharf as a premier waterfront shopping, dining and entertainment destination.”
Taylor added that Centennial would build on Portside Wharf’s strong market positioning as one of Brisbane’s premier retail-lifestyle destinations given its location is primed for growth with around $12bn worth of urban renewal projects earmarked for the immediate area.
“Underpinning our confidence in our acquisition, is an extensive research study carried out by Location IQ in July 2024 that predicts the population growth within a 20-minute drive radius of Portside Wharf to increase by 18% by 2041, equating to around 1.22m residents. Mirroring population growth, retail expenditure is also set to increase by 3.4% per annum over the same period to $45.9bn.”
Centennial has also appointed, Jessica Lacy as a dedicated Retail Asset and Leasing Manager, with strong experience managing similar high-end retail precincts to oversee Portside Wharf’s retail precinct and support future growth of its retail platform.
The property and investment manager’s latest retail joint venture partnership follows on from two recent acquisitions the group made with its Adelaide-based retail investment partner – Parkstone Funds Management – who jointly acquired two regional shopping centres in Bundaberg in Queensland and in Orange, New South Wales.
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