Woolworths puts Lismore Centro in its shopping basket
As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
Woolworths has taken the unusual step of buying the Centro Lismore, NSW, shopping centre, where it is the anchor tenant on a short-term lease.
Woolworths is traditionally a developer of shopping malls, but is not a long-term holder of these assets.
Corporate affairs spokesman Simon Berger told Property Observer the main focus for Woolworths remained being a retailer and “looking for opportunities to serve our customers”.
“We will develop or acquire where it suits our interests and customers, but we also lease in plenty of places,” he says.
“We are quite flexible and adaptable quite… We don’t have a one-size-fits-all approach.”
Berger would not confirm if Woolworths had plans to acquire similar assets: “We won’t rule it out, but equally we won’t rule it in.”
Neither Berger nor Heath Crampton, the Colliers agent who negotiated the sale, would disclose the sales price. The Australian Financial Review says Woolworths paid about $23 million, a yield of less than 7%.
Centro Lismore is part of the Centro MCS 34 syndicate, which includes seven shopping centres, including Centro Pinelands, valued at $28 million.
Centro Lismore was valued at $15.9 million as of December 31 2010, down 3.64% from a valuation six months previously. It has 100% occupancy and 0.4% sales growth.
The Woolworths lease is due to expire in December 2015 and according to the AFR, the syndicate has refused to renew the lease.
The centre is located in the heart of Lismore. Besides Woolworths, it has a Rivers clothing store and 17 other speciality stores and has a gross lettable area of 8,300 square metres.
Heath Crampton has been appointed to sell the Centro Albion Park, which also has Woolworths as the anchor tenant. It is one of seven regional Centro malls listed for sale by the ailing shopping centre business since July.
An expressions-of-interest campaign for the Albion mall closed on August 23. Crampton says the store has not yet been sold, but “a party has been nominated”.
Centro is looking to liquidate its retail portfolio under a restructuring plan to form a new entity. Shareholders will vote on the restructure in December.
In June Charter Hall Retail REIT completed its purchase of a portfolio of eight Woolworths supermarket anchored shopping centres for $284 million from Woolworths Ltd.