This article is from the Australian Property Journal archive
ASTUTE property player Newmark Capital has added another asset to its burgeoning portfolio, snapping up Stockland’s Tooronga Village neighbourhood shopping centre in Melbourne’s inner south east.
According to industry sources, Chris Langford and Simon Morris’ Newmark Capital has paid $63 million for the 8,793 sqm centre, which has 488 parking spaces is on an 18,430 sqm site, 8km from the city.
It is anchored by a full line Coles supermarket and First Choice Liquor along with 30 predominantly non-discretionary specialty shops, returning a net income of $4.535 million fully leased.
The centre services some of Melbourne’s wealthiest suburbs, namely Toorak, Malvern, Hawthorn, Kooyong and Glen Iris, where the median house price ranges between $1.7 to $2.8 million.
Selling agents Mark Wizel, Justin Dowers, Trent Weir and Kevin Tong of CBRE declined to comment.
APJ also contacted Newmark Capital for comment. The Tooronga Village acquisition will increase Newmark’s footprint across Melbourne.
Last year, a Newmark Capital Limited-managed fund paid $135 million to Vicinity Centres and its co-owner for the Brandon Park shopping centre, further east in Wheelers Hill.
Newmark Capital is preparing to embark on a $450 million overhaul of South Yarra’s Jam Factory entertainment complex on Chapel Street. Its ambitious plans include the construction of seven retail and commercial buildings ranging from three to 15 storeys with 57,228 sqm of office space, 4,771 sqm of food and drink premises, 35,747 sqm of shopping space. The cinema will be retained.
It purchased the nearby Como Centre on the corner of Toorak Road from Mirvac for $236.5 million in 2016, and then gained a windfall from the $145 million sale of its refurbished A-grade office building at 417 St Kilda Road, via a managed syndicate that had acquired it for $81 million just five years earlier.
The sale of Tooronga Village is part of Stockland’s $1 billion divestment program as the major developer seek to increase its portfolio exposure to the booming industrial sector from 21% to between 25% and 35% over the next five years. In May, the property giant announced it had sold $284.5 million of non-core retail assets.
Meanwhile, Sydney-based investor Isaac Solomon has emerged has the purchaser of Coburg North Village in Melbourne’s northern suburbs in a $47 million deal negotiated by CBRE’s Wizel and Dowers.
The price, reflecting a 4.7% yield, represents a hefty premium on the previous sale of the centre in November of 2016, when another private investor paid Coles $38 million.
Coburg North Village opened in August 2015 and comprises a full-line Coles supermarket and Liquorland of 4,175 sqm, as well as 15 convenience-based specialty retailers, including a medical centre and pharmacy, and on-grade parking for 303 vehicles.
Dowers said the property’s significant future development upside with a highly exposed site of 18,560 sqm and substantial frontages to Gaffney and Sussex streets, was an important attribute.
The long-term Coles and Liquorland lease runs until 2031 and accounts for more than 60% of the 6,284 sqm centre’s weighted average lease expiry, with total return at more than $2.4 million per annum.
“There is no doubt that the market for such assets is not as rosy as it has been in previous years and that is always going to affect the level of enquiry and the negotiating process,” Wizel said.
“But on the positive side there remains an astute investment cohort who are wedded to the retail sector as the traditional defensive asset class that it is, and of course that is particularly the case for well managed centres.”
