Melbourne-based Nikos Property Group has forged its fourth partnership with Vicinity Centres (ASX: VXN) after settling on a $385 million deal to acquire the GPT Wholesale Shopping Centre Fund’s 50 per cent interest in Northland Shopping Centre.

The deal is the largest Victorian retail transaction since 2018 and firms up Nikos Property Group’s relationship with Vicinity Centres, which co-owns and manages the asset.

Since 2022, Nikos Property Group has outlaid $828 million to acquire four 50 per cent stakes in Vicinity-owned and managed assets, the most recent being the $170 million deal for Adelaide’s Elizbeth City Centre last year.

The previous deals comprise the $138.2 million acquisition of Adelaide’s Colonnades Shopping Centre in 2022 and the $134.5 million deal for Melbourne’s Broadmeadows Central in 2023.

“The divestment of GPT Wholesale Shopping Centre Fund’s 50 per cent interest in Northland continues the implementation of the fund’s strategy to recycle assets to enhance portfolio quality and composition, create liquidity for investors and position the fund to continue to deliver consistent outperformance,” says David Sleet, fund manager at GPT Wholesale Centre Fund.

The deal for Northland was negotiated by CBRE’s head of Pacific retail capital markets Simon Rooney in conjunction with Lachlan MacGillivray, the Asia Pacific managing director of retail capital markets at Colliers.

Rooney says the acquisition is “strategic and highly opportunistic” for Nikos, as co-owned stakes in high-quality regional assets were becoming harder to secure.

“The Northlands transaction highlights the resurgence of investor interest in large regional and sub regional shopping centre stakes, with 15 part-share deals totalling $3.5 billion having been completed since the start of last year,” he says.

“We expect to see a further improvement in overall investment activity and investor demand as interest rates are lowered, with several large regional shopping centre transactions currently in play.”  

CBRE says the transaction was supported by the retail centre’s “robust performance, secure major tenant covenants and significant future development potential”.

The property is located 13km north-west of the Melbourne CBD, with the site offering potential for a long-term staged masterplan development subject to planning approvals.

“This landmark transaction shows a vote of confidence in the market and strategically positioned, highly resilient ‘fortress style’ assets continue to be in strong demand,” says MacGillivray.

“The retail sector is experiencing significant tailwinds, as demonstrated in the recent REIT results, highlighting positive leasing spreads and extremely strong centre occupancy.”

Northland Shopping Centre occupies a 19ha site on Murray Road at Preston with a gross lettable area of about 98,238sqm. The property has an attractive major tenant WALE (weighted average lease expiry) of nearly 7.1 years by income.

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