The country’s biggest owner of suburban malls has made its first acquisition in two years after buying Canberra’s Cooleman Court centre from Mirvac.
Region Group, the country’s biggest owner of smaller suburban malls, has made its first acquisition in almost two years – and its first in Canberra – after paying $74 million for Mirvac’s Cooleman Court shopping centre.
Its shift back into acquisitions signals overall confidence in current mall valuations and cap-rate settings following writedowns across the sector.Region’s deal for Cooleman Court was struck at slightly above the mall’s December 31 book value of $73 million but incorporates the expected valuation gain from the expansion of the Woolworths supermarket within the centre, which is due to be completed by Christmas. The mall had a peak value of $76.5 million at the end of December 2021.
Region Group acquired Cooleman Court on an initial yield of 5.5 per cent, but with the potential to lift that return to 5.8 per cent through leasing vacant space in the mall. Region’s portfolio trades on an average cap rate of just over 6 per cent.as it battles the headwinds of higher interest rates, exposure to the struggling CBD office market and weak first-home buyer demand for housing.
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