Wodonga Plaza’s major retail boom is pushing more shoppers south of the Border.

See story here: https://www.prime7.com.au/news/3790-retail-boom

An intuitive understanding of the retail sector together with robust investment and tenancy strategies have been credited to the significant valuation uplift received for M/Group’s recently acquired shopping centre assets. The valuation uplift for Wodonga Plaza in Victoria and Albany’s Chester Pass Mall are both estimated at some 15-20% since acquisition.

M/Group shopping centre acquisitions took place throughout 2017 amidst increasing online and local competition. Both centres were sold by major retail conglomerate, Vicinity, as non-core assets. M/Group saw this as an opportunity to secure key assets and add value in important regional hubs.

M/Group Managing Director, Mr Lloyd Clark, believes regional shopping centres serve an entirely different purpose to their city counterparts, and says it is where M/Group’s experience and understanding of the retail sector can really contribute.

“While retail is a changing landscape, shopping centres located in regional areas represent an important social hub where residents go into town to socialise and be part of the community,” he said.

“At acquisition, Wodonga Plaza’s weighted average lease expiry (WALE) was under 4 years, and the centre was facing increased competition with two new shopping centres opening within a kilometer of the location. Vacancies were high and customers were having to cross the border to Albury for certain retailer needs. It was a problematic landscape, but we were confident in our capacity to turn things around.”

M/Group initially conducted a needs analysis and invested funds to the value of $2.5million on a major mall reconfiguration. This introduced a food court, two mini-major retailers and an increased fashion offer.

The company have renewed or signed new leases for over 30 tenancies at the centre within 12 months representing over 60% of the tenancies and lifted the WALE to circa seven years and revitalized the centre with a number of new tenancies. The shopping centre is today poised to be 100% leased by the end of the year.

Closer to home, planning is underway to maximise the potential of the company’s Albany asset. M/Group Director, Mr James Collis, who leads the company’s asset management division, said Albany presented great opportunities particularly in the bulky goods, food and entertainment areas.

“In contrast to Wodonga, which is the fastest growing regional city in Victoria, we see Albany as a more stable and mature market with gradual growth and a great deal of redevelopment potential,” he said.

“Understanding retail behaviours and digging deep into local demographics has enabled us to make considered judgements and decisions that not only protect our investor interests but also create environments that will attract regional shoppers.

“There are a number of plans on the table for Albany, but significant traction has already been made through our targeted tenant negotiations. It is incredible what can be achieved when a clear focus is given to building an asset. Additionally, we have been able to renew, relocate and expand a number of the sitting tenancies at the centre who are now all trading well”

M/Group’s Albany shopping centre includes 2.7 hectares of undeveloped retail zoned land and the company has already negotiated an extended lease agreement with Woolworths and a number of other tenants to achieve its increased valuation.

Following a series of oversubscribed investment fund releases, M/Group is seeking to raise $11.5million to support the development of a new apartment hotel with a secure 15-year lease to national operator, Quest.

The Ascot Quest Trust will develop a 112 key Quest Apartment hotel in Ascot. The prime high-profile corner site is strategically located at 266 Great Eastern Highway, near Perth Airport and enroute to the Perth CBD. The location will enable Quest to take advantage of its close proximity to Ascot racecourse, Optus Stadium, Crown Casino, Perth CBD and Perth airport and a number of arterial roads.

Development approval has already been secured with construction scheduled to commence early 2019.

It is the second Quest project undertaken by M/Group, following the company’s success earlier this year in raising $7.6million to develop a 90-key complex in Joondalup. This investment fund oversubscribed within weeks of its release and is now under construction.

M/Group Managing Director, Mr Lloyd Clark, says both projects represent the prospect of a secure investment in a strategic location.

“Quest is Australia’s leading apartment hotel operator, which is 80% owned by Singaporean serviced apartment group The Ascott Limited, a subsidiary of Real Estate giant CapitaLand. This means the secured 15-year lease with further 5-year options is extremely well supported, and the property itself has capital uplift supported by independent valuation,” he said.

“From an investor’s perspective, development risks have been significantly mitigated providing a strong and secure opportunity for investors.”

The overall investor return (IRR) is targeted at 15.4% over an estimated seven-year term and annual distributions are forecast to commence at 10% pa. M/Group is seeking investors with a minimum investment of $50,000 and multiples of $10,000 thereafter.

The property will be constructed by M/Group’s internal building division, M/Construction, which is also building the Quest Joondalup and has prior experience in the delivery of quality residential and serviced apartments. M/Construction was recently named Best New Builder by the Master Builders Association.

“Quest was established in Melbourne in 1988 with one property in Fitzroy, and today has over 150 properties in Australia, New Zealand and Fiji,” Mr Clark continued.

“We believe the Ascot location is a great fit with Quest’s ongoing growth model in WA, and M/Group is delighted to be entrusted by such a reputed operator to deliver on its next venture.”

M/Group is an integrated property company that has over $170 million of Investor funds under management with a projected asset value of approximately $1 billion.

The Ascot Quest Trust offer will open shortly and is expected to fill quickly.

For more information or an investment prospectus contact info@mgroup.com.au or (08) 6380 0400.

With $170million of funds currently under management and over $500million of projects in its portfolio, M/Group’s influence in the development funds management sector has steadily increased in pace over the last twelve months, resulting in series of development funds oversubscribing within weeks of their release. The company’s newest investment opportunity located in Wellard is well-placed to follow suit.

The new development fund seeks to raise $6 million to support the acquisition of an 8.3-hectare parcel of land in an off-market transaction within the established suburb of Wellard. The company proposes to develop 116 premium residential home sites based on a development model that has proved highly effective in the neighbouring suburb of Secret Harbour.

M/Group Managing Director, Mr Lloyd Clark, said the model used to assess and ultimately acquire attractive property propositions is now established and proven, and there is a strong demand for similar projects in the investment space.

“The Wellard fund opportunity encompasses several key attributes and factors that has led to many of our previous funds attracting investors and oversubscribing prior to the nominated closing date. This has created its own sense of momentum and we are fielding more and more enquiry even prior to an opportunity being announced,” he said.

“We have now raised over $70million in the last twelve months and continue to be strategic in minimising risk and providing opportunities that are genuinely rare and exciting.“

The Wellard site is located at lots 670 & 1388 Bertram Road, representing one of the last remaining development sites within the master-planned community, which is supported by an approved Local Structure Plan, transport infrastructure, medical facilities, schools and shopping.

The site is comparable to company’s previous boutique land acquisition in Secret Harbour, which was highly successful in the marketplace and resulted in the development program being fast-tracked to keep up with demand.

“M/Group’s approach to its investment portfolio is considered and measured, which is always well received by investors in varying market climates,” Mr Clark continued.

“Our in-house capabilities have also increased over the last twelve months, which provides addition confidence to deliver on program goals. We are thrilled by the results of our work this year and continue to seek new opportunities.”

M/Group is targeting investors for the Wellard Fund with an internal rate of return (IRR) of 22% and forecast return on equity (ROE) of 50% over a 2.5-year term.

A minimum investment of $50,000 is required with multiples of $10,000 thereafter over an estimated investment term of 30 month.