This article is from the Australian Property Journal archive
SYDNEY-based property fund manager Argus Property Partners and development and investment firm Kaipara Property Group have sold a large format retail complex in Bathurst for $31.5 million.
Located on a 52,050sqm site land-rich site at 3 Pat O’Leary Drive, Kelso, HomeCentre Bathurst was sold with new leases to national chain retails including Harvey Norman, Amart Furniture, Eureka Street Furniture, Cheap as Chips, Jaycar and World Gym, in addition to a Spotlight and Petstock store.
James Douglas from CBRE exclusively managed the off-market sale of the complex to a private consortium represented by Precept Property Partners and Stabilprop Investments.
“The sale process was highly competitive, with investors looking through recent market headwinds to an improving outlook for both retail sales and the cost of finance,” said Douglas.
“LFR assets are traditionally tightly held and rarely traded, with investors attracted to the strategic landholdings that these centres typically occupy and the potential for future development. They also offer transparent and reliable cashflows, with strong in-built rental growth and high expense recoveries, providing a sustainable base for income growth.”
The sale represents one of very few recent LFR transactions, after only seven centres across the country in 2023, for a combined total of $368 million.
It is also the second major retail deal in Bathurst over the last year, after Sydney-based property and development firm Mintus purchased Bathurst Chase shopping centre for $17.5 million in a deal also handled by CBRE.
“LFR assets are positioned to continue to perform well over the next few years. With minimal new developments over the past two years and extremely tight vacancy persisting for prime grade assets, rental growth is set to outperform most sectors,” added Douglas.
“A likely reversal of interest rates in the second half of 2024 coupled with record population growth is expected to underpin ongoing investor interest in the asset class.”
According to recent research from CBRE, private investors remain locked in on the large format retail investment market, holding a two-thirds share of the asset class.
While another report from JLL found the LFR asset class recorded a 79% drop in transaction volumes over 2023, as scarce supply resulting in minimal opportunities, despite this strong demand.
For the vendors, the sale comes after carrying out a successful repositioning strategy for the asset.
“We are very pleased with the leasing and delivery results which has set the asset up for a strong future and provides a diversity of popular retailers for the people of the Bathurst region,” said Toby Daniel, joint managing director at Kaipara Property Group.
“The acquisition represents our first step into the retail sector. It’s a well-managed asset, which has the opportunity for further value enhancement through active management and strategic leasing to drive returns,” said Grant Traub, director at Precept Property Partners.
