This article is from the Australian Property Journal archive
SHOPPING centres are again hot property, with Hong Kong investor JY Group outlaying $167 million for a 50% interest in Roselands Shopping Centre in Sydney’s south-west.
The deal arrives as UniSuper and Cbus Property have bought major key stakes in AMP Capital’s Pacific Fair and Macquarie Centre malls for $2.2 billion in Australia’s largest-ever retail property transaction.
CBRE’s Simon Rooney negotiated the off-market sale of the Roselands stake on behalf of CIP Asset Management.
Located 16 kilometres south west of the Sydney CBD, Roselands was one of Sydney’s first regional shopping centres, and the largest in the southern hemisphere on its completion in 1965.
“Roselands provided an extremely rare and highly sought-after opportunity to acquire a stake in a Sydney metropolitan-based regional shopping centre,” Rooney said.
“JY Group strategically acquired the asset off-market prior to a formal campaign commencing, with the price reflecting a material premium to the most recent external book valuation and a continuing shift in investor sentiment towards premium retail investment opportunities.”
The sale represented a passing yield of about 6.3%. Fully leased, that would stand at 6.5%. Vicinity owns the other half-stake, valued at $139 million and given at 6.25%.
Roseland recently underwent a $90 million redevelopment and an upgrade to the ground floor fresh food precinct, and has a new Aldi, new Woolworths and a refurbished Coles that together generate more than $140 million in annual turnover.
It has a gross lettable area of 63,344 sqm, and is also anchored by Myer and a new Kmart discount department store that recently replaced Target.
Rooney noted that Roselands’ strong performance, track record and future value-add, mixed-use development potential had been key buyer drawcards.
“Located within an extensive and well-established trade area, it provides an immediate opportunity to create a truly mixed-use town centre precinct, given the sizeable site area of 14.3 hectares, prominent metropolitan location and ready access to public and private infrastructure.”
JY Group already owns three Melbourne shopping centres, having teamed up with Mulpha Australia to acquire Brimbank Shopping Centre for $153 million in 2019, before this year joining with property funds manager Haben to purchase Casey Central from M&G for $225 million, on a yield of 5.4%, and Stockland The Pines for $155 million.
Rooney said retail is “the real mover at present”, and there is a $2 billion pipeline of deals expected to land between now and the end of the year.
“The comparative returns and value proposition is clearly compelling, with major owners now able to competitively rebalance portfolios, allowing incoming investors to strategically acquire some of Australia’s best retail assets,” Rooney said.
“This return of institutional capital into the sector, combined with strong private investor demand, will see heightened transactional activity into 2022.”
CBRE research shows almost $4.52 billion has flowed into Australian retail investments in the June and September quarters, up 118% on the same period last year and markedly ahead of the comparative spikes in office and industrial transactions, which were up 88% and 87% respectively.
Other recent major deals include Vicinity Centres acquiring a 50% interest in Harbour Town Outlets Gold Coast from Lendlease’s Australian Prime Property Fund Retail for $358 million, while GPT has confirmed it is in discussions with buyers for the Casuarina Square in Darwin and Wollongong Central shopping centres for a speculated combined sum of more than $820 million.
Australia’s retail market activity has been dominated of late by neighbourhood shopping centres, convenience centres and large format complexes that have performed strongly and continued to stay open through the pandemic, although sub-regionals – the “middle child” – have also seen a resurgence, according to Real Capital Analytics’ Ben Martin Henry on Australian Property Journal’s Talking Property podcast.
