The move comes after an earlier play for the complex by rival Vicinity Centres stalled and that company moved on from a deal which could have resulted in it paying up to $180m and putting a DFO on the site.
Charter Hall is likely to pay about $10m lower and add the complex to its growing collection of non-discretionary retail centres, where it is focused.
The parties declined to comment but the company’s retail holdings are well positioned for both a slowing global economy and for value-adding plays as more shoppers switch to convenience centres.
Charter Hall has a long track record in retail property with both its listed Charter Hall Retail REIT and a series of ventures with superannuation companies, including Mercer and TelstraSuper.
The company is also targeting the Corio Village shopping centre in the Victorian satellite city of Geelong in a deal worth about $145m.
The move on the centres would signal both Charter Hall’s belief in the retail property and the broader recovery in the sector, which is getting more competitive as large institutions return to buying.
The Mulgrave centre sits in the city’s growing southeast and Charter Hall could capitalise on the area’s strong growth by turning over some of the complex to more productive retailers which are part of its network.
The supermarket-anchored subregional shopping centre is positioned on 0.62ha and is on a prominent position along the Monash Freeway.
It is weighted towards non-discretionary services and food tenants, which is in line with Charter Hall’s focus on retail property.
There are three supermarket operators – Woolworths, Coles and Aldi – plus a Big W along with 10 “mini majors”, 105 specialty stores and kiosks, and offices.
The move to sell the centre came well ahead of Elanor’s suspension from the Australian Stock Exchange in 2024 and its decision to liquidate its flagship hotel fund.
The Waverley Gardens Partnership, an unlisted joint venture between Heitman and Elanor, bought the complex from US giant Blackstone in 2018 for $178m.
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