Midland Central Property Trust

The Midland Central Property Trust was established in 2012 for the $12.3 million purchase of Midland Central Shopping Centre. The Fund’s objective was to provide investors with ongoing income distributions as well as potential for capital growth through exposure to a high-traffic neighbourhood Centre anchored by three strong national tenants in IGA, Optimal Pharmacy and Dan Murphy’s. Our initial analysis projected target distributions of 8.3% per annum and an internal rate of return of 12%.

Throughout its opening three years, the underlying tenancies for the Fund provided investors with a strong blue-chip income stream to deliver distributions of 10.4% per annum. As the Fund progressed, we saw several opportunities to enhance this potential further through capital works and leasing negotiations. These included:

• Updating the façade on the Pharmacy to improve visual presentation and maximise foot traffic;

• Resetting the lease with Optimal Pharmacy for a new ten-year term; and

• Working with Dan Murphy’s on refurbishments to their store to drive turnover growth and an uplift in rental income.

With the end of the initial Fund term approaching in 2020, our team made the recommendation to investors for a further two-year extension to enable a resetting of the lease on the IGA tenancy.

Our proactive negotiations with the tenant resulted in the IGA exercising their lease option to extend the tenancy for a further ten-year term, ultimately underpinning an uplift in the Fund’s WALE and cementing a strong case for divestment.

Westbridge secured the sale of the Centre in early 2023 for $19.3 million, representing a 56.5% uplift on the asset’s initial purchase price. Over the course of the Fund, investors benefited from average income distributions of 11.7% per annum – significantly above the initial target of 8.3%. Combined with the capital gain from the sale, investors realised a total return of 207%, excluding their initial equity investment.