This article is from the Australian Property Journal archive
SYDNEY-based Tipalea Partners has paid $19.7 million for the Muswellbrook Fair shopping centre in the New South Wales' Hunter Valley.
Tipalea’s managing director Scott Spanton said the purchase ‘nicely bookends’ the year for the group after it bought the Portside Business Park at Botany for $11.8 million in February.
The latest acquisition increases Tipalea’s total assets to more than $100 million.
“As with all our previous projects, Muswellbrook Fair enjoyed very strong support from our investor base and was fully subscribed within two weeks of opening. It fits our business model perfectly as it provides plenty of upside and gives us the ability to add value to what has been an underperforming asset in the past.
“We expect to deliver a 15% IRR over the next two years as we reposition the centre and this will have very positive benefits for not only the existing tenants, but also the local community in Muswellbrook,” he added.
“The centre has not had the hands-on attention that is required for retail assets and we look forward to bringing our ground level retail skills to bear over the next two years as we turn it around,” Spanton said.
Tipalea’s purchase of the Muswellbrook centre also includes an adjoining 3,500 sqm development site, which is earmarked for a childcare centre.
Muswellbrook Fair comprises just over 8,900 sqm of retail space on a site of 28,000 sqm. It is anchored by a Coles supermarket, Harvey Norman, The Reject Shop, Liquorland, Best and Less, Subway, TriStar Medial, Optus and Telstra, returning a net income of $1.63 million.
The acquisition represents an initial yield of 8.5% rising to 8.65% fully leased.
“We are very excited to be acquiring what is the most convenient centre in Muswellbrook on an 8.5% cap rate with significant scope to add value, and with over 80% of the income backed by national retailers we feel very comfortable about the future.
The sale was negotiated by Phil Gartland of Stonebridge Property Group in conjunction with Knight Frank.
Australian Property Journal