By Aimee Chanthadavong

Colonia First State (CFS) Retail Property Trust has agreed to buy four Direct Factory Outlet (DFO) centres from Austexx for $498 million.

The four centres that will be acquired are the DFO Homebush in New South Wales and DFO Essendon, DFO Moorabbin and DFO South Wharf in Victoria.

Colonial First State Property Retail, CFS Retail's manager said it will buy the centres at a cost that reflected an 8.26 per cent weighted average capitalisation rate.

“This is a significant milestone for CFX. It provides investors with exposure to a retail format which management expects, based on overseas experience, can achieve sales growth in excess of regional and sub-regional shopping centres over the medium term," Darren Steinberg, head of property, said.

“The DFO centres have been acquired at attractive pricing relative to recent comparable transactions and, in line with our acquisition of Northgate Shopping Centre last year, this acquisition provides an opportunity to apply our intensive asset management capability to enhance long-term returns to unitholders.”

According to the company, the retail outlets are recognised as growing retail sub-sector and were chosen for their brand recognition across large catchment areas, their close proximity to major arterial roads.

As part of the acquisition, CFS will own the Australian ‘DFO’ and ‘Homemaker Hub’ brand names in VIC, NSW, WA and SA.

“This deal will provide CFS the ability to selectively expand our presences in these markets,” Michael Gorman, CFS fund manager, said.