This article is from the Australian Property Journal archive
THE Tamworth Homespace in regional NSW has come to the market in what is touted as the first large-format retail asset offering to hit the market in 2023.
Anchored by The Good Guys and Fantastic Furniture and supported by a mix of 13 large format retailers, Tamworth Homespace has a weighted average lease expiry (WALE) of four years and growth opportunities to increase income. More than 96% of its income is derived from national retailers with an average tenure of 11 years.
It is positioned on a 31,160 sqm land holding with flexible zoning that offers the opportunity for development and value-add strategies, including drive-through offerings on the freestanding pad sites given its 200 meters of frontage along the New England Highway.
JLL’s Nick Willis, Sam Hatcher, Sebastian Fahey and David Mahood have been appointed to the expressions of interest campaign, closing 29th June.
Willis said the large format retail sub-sector has seen a resurgence in investor appetite in recent years.
“Spurred largely by the strong trading performance of the retailers, coupled with the forecast rental growth and the irreplaceable nature of the assets given the significant increases in construction costs recently. Furthermore, LFR assets have been tightly held with no centres trading in the year to date, and sales volumes down on the increased trading activity of last year which was up 76% on the historic five-year average.”
“Tamworth Homespace is the first traditional LFR centre to be offered to the market formally this year and we expect strong interest from a broad capital pool.”
Hatcher said large format retailers are expanding their businesses due to strong sales performance, however limited new developments and higher construction costs are resulting in rental growth pressure. Large format retail was one of only two retail property sub-sectors to record a decline in vacancy rates since the onset of COVID-19, according to JLL.
“This highlights the centre’s low average rent of $195 per sqm and the likelihood of positive rental reversions in the future, which will drive income growth from the asset.
Tamworth, recognised as the largest inland city in NSW west of the Great Dividing Range and to the Tamworth Country Music Festival and the Big Golden Guitar, has over 3,700 of lots either proposed or approved.
