This article is from the Australian Property Journal archive
TAMIM Funds Management has sold the Newcastle-based Elermore Vale Shopping Centre to a private investor from Sydney for $27 million, reflecting a 4.91% passing yield.
Located on a 2.38-hectare landholding, the 4,063ssqm neighbourhood shopping centre is anchored by Ritchies IGA with 15 specialty stores and 100% of income weighted toward non-discretionary uses.
“Elermore Vale Shopping Centre was a foundation asset for our group when it was acquired in 2017 for $17.5m,” said Jeff Taitz, co-founder at TAMIM.
“The asset suited our managerial capabilities and performed to expectations during the COVID-19 crisis due to our emphasis on retaining and securing non-discretionary tenancy composition. I believe our investors will be very satisfied with the return it has provided.”
Sebastian Fahey, Dylan McEvoy and Nick Willis from JLL, alongside Phillip Gartland and Alexander James-Elliott from Stonebridge, managed the off-market sale, achieving a 4.80% passing yield at a rate of $6,645 per sqm GLA.
“The asset attracted considerable interest due to the value-add opportunities, given its high growth metropolitan location offering plus significant future development upside. Only 10km from the Newcastle CBD, the sale of Elermore Vale highlights the clear demand for retail assets in attractive metropolitan locations with significant growth prospects,” said Fahey.
“In the current changing economic environment, the ability to secure a neighbourhood shopping centre with tangible competitive advantages and genuine value add opportunities, is highly attractive in the current market.”
The site also offers favourable development controls and upside potential and includes 235 secure at-grade bays.
“The centre’s protection against future competition as the only mixed-use land holding within Elermore Vale and immediate access to approximately 31,637 residents is a major drawcard,” added James-Elliott.
“Investors are recognising that Newcastle is a strong location to place capital, and its renewal and subsequent gentrification through private and public investment is significant and will continue to attract investors to this market.”
Neighbourhood shopping centres have been among the few retail assets to change hands lately, as the US banking crisis and the discrepancy between the bid and offer spread for assets have brought activity in the sector to a virtual standstill.
With Woolworths offloading a fourth neighbourhood centre anchored by one of its supermarkets for $35.2 million, in Mountview Shopping Centre, following the sale of another Woolworths-anchored asset in Westpoint Shopping centre in south Brisbane for $46.5 million, on a 5.44% return.
