This article is from the Australian Property Journal archive
SAM Tarascio’s Salta Properties has sold their Plumpton sub-regional shopping centre development site for $20 million to Revelop.
Under developers and shopping centre owners Revelop the site, which had a total project value exceeding $200 million, is set to become the first new sub-regional development in Sydney in more than 20 years.
Nick Willis and Sam Hatcher from JLL’s retail investments Australian team exclusively managed the direct off-market deal.
“Core landholdings in Sydney metropolitan locations for shopping centre developments are extremely rare. The majority of these sites are acquired by the operators, Woolworths & Coles, due to fierce competition for key trading locations,” said Willis.
Salta acquired the 36,900sqm Jersey Road site, which adjoins Lendlease managed Plumpton Marketplace, back in 2005.
Then in 2018, Salta gained development approval for a substantial 17,686sqm sub-regional shopping centre through the Land & Environment Court.
The project was previously known as Plumpton Gardens and will comprise a shopping centre to cater to the growing western Sydney market, sitting around 36km from the Sydney CBD with connections to the M7 and M4 Motorways.
“The acquisition of Plumpton Gardens development site is in line with our growth strategy for the business. We continue to acquire shopping centres and development sites in key locations which will deliver strong total returns and are supported by long term macro trends of strong population growth, improving gentrification, and limited new retail floor space supply,” said Anthony El-Hazouri, founder of Revelop.
“A brand new sub-regional shopping centre has not been built in Sydney for over 20 years. In this time the retail landscape has vastly changed and evolved. This opportunity provides us with a clean slate to deliver what will be a state of the art in the sub-regional sector and meet the demands of today’s customer.”
Willis noted the underlying supply and demand imbalance across the sector, with 1.13sqm of retail space created per additional person in Australia and the national population expected to grow by 1.5% per annum over the next five years.
“Using the 1.13 sqm historic ratio as a scenario, Australia will require between 2.06 and 2.58 million sqm of retail floor space to match the population growth over the next five years. However, there is currently only 285,700 sqm in the supply pipeline under construction, which equates to just 0.14 sqm per additional person,” added Willis.
The per capita supply is anticipated to be lower in the future than historically, due to the high penetration of e-commerce, with e-commerce now accounting for less than 13% of retail spending.
“When markets are turbulent, it often provides opportunities to gain access to assets which rarely exchange hands,” said Hatcher.
“The retail sector is experiencing a resurgence in demand as capital looks for more stabilised pricing (vs. traditional office & industrial), supportive demographic tailwinds, and an ability to diversify income streams through redevelopment into alternative uses”.
Back in February, Salta listed an office building in the East End of the Melbourne CBD to the market that could make way for a 52-level tower with luxe apartments and a hotel, with expectations at $75 million.
The group previously listed the 13-level building at 63 Exhibition Street at the end of 2020 with hopes of $80 million.
