GATEWAY Plaza Shopping Centre has been sold for $39.25 million to a Sydney-based investment company which has put ambitious expansion plans on hold for the east Warrnambool retail site.
Armada Funds Management acquired the landmark 11.9-hectare property with 30 retail outlets, 1000 parking spaces and 6.4 hectares of expansion land from AMP Capital Investments.
Investors warmed to the purchase with subscriptions for Armada’s new Gateway Plaza Trust being oversubscribed after the prospectus forecast an 8.3 per cent yield.
With last year’s plaza retail sales revenue forecast of about $59 million and upbeat outlook for 2014, Armada considered the purchase a good acquisition to its portfolio which includes two shopping centres in Adelaide, two in NSW and one in Queensland.
“We think Warrnambool is a strong centre in an affluent demographic and is the only sub-regional hub between Geelong and Mount Gambier,” Armada’s managing director Chris Monaghan said yesterday.
“It is a good place to own a shopping centre.
“Between us and Saputo’s purchase of Warrnambool Cheese and Butter, the region should enjoy renewed investment.”
Mr Monaghan, who visited three times in the lead-up to the sale’s settlement on December 20, said he thought AMP’s controversial expansion plans to double the retail space were too ambitious in the short-term.
He was unsure how the expansion land adjacent to the plaza site would be used, but indicated there would probably be a mild facelift of the existing plaza.
“We’ll be talking to major national retailers and get their perspective on expansion,” he said.“Warrnambool probably needs a bit more retail, but not too much otherwise it would be strangled.”
AMP fought several planning battles with Warrnambool City Council over restrictions on expansion and had long-held hopes of attracting another major tenant like Big W.
Mr Monaghan said Armada considered shopping centres a better investment than office complexes.
“There are new tenants coming to the plaza and Cotton On has shown its confidence with four shops,” he said.
“In a good retail environment like Warrnambool the city centre can co-exist sucessfully with other outlets like our plaza and Harvey Norman and the bulk goods precinct.”
Mr Monaghan is no stranger to Warrnambool, having competed in the 1982 Warrnambool Gift where he made the semi-finals.
“I remember Warrnambool with great fondness,” he said.
Further east at the Homemaker Centre, agent David Turner is keeping a close watch on the plaza ownership change.
He and the centre owners were angered by AMP’s influence in changing a city council ruling which frustrated ambitions by Aldi to open an outlet there.
“Our target for 2014 will be to try again for a permit suitable for Aldi,” he said.“We don’t want a dedicated supermarket — Aldi’s mixed use sits well with our mix of outlets.”