This article is from the Australian Property Journal archive
ACTIVITY in the retail sector is gathering steam, with GPT confirming the $402 million sale of Wollongong Central to Sydney-based property funds manager Haben and its Hong Kong-based backer JY Group.
The deal comes as GPT also offloads Casuarina Square in Darwin for $420 million, while UniSuper and Cbus Property bought major stakes in AMP Capital’s Pacific Fair and Macquarie Centre malls for $2.2 billion in Australia’s largest-ever retail property transaction.
JY Group last week outlaid $167 million for a 50% interest in Roselands Shopping Centre in Sydney.
Haben and JY Group teamed up earlier this year to purchase Casey Central from M&G for $225 million, on a yield of 5.4%, and Stockland The Pines for $155 million.
GPT held the now-divested assets in the GPT Wholesale Shopping Centre Fund (GWSCF). Wollongong Central’s sale price is ahead of the fair value of $390 million, however it was valued at about $490 million two years ago – before the pandemic accelerated retail woes and slashed billions from the value of retail assets across the country.
The 54,919 sqm mall is on 4.2 hectares of land and was 97.3% occupied across its 212 tenancies at the end of December. It is anchored by a David Jones department store, Coles supermarket, Target, and H&M, and has more than 2,100 car parks.
“The divestment of the asset is consistent with GWSCF’s strategic focus on near-term asset enhancements and longer-term value creation, with mixed-use masterplans progressing for a number of assets within its portfolio,” GPT said.
Haben will put the asset into the new Haben Wollongong Trust.
Colliers agent Lachlan MacGillivray, who managed the sale, said there is renewed investor confidence and purchaser engagement for larger retail assets.
“The sale of Wollongong Central is a show of strength for Australian retail investment in the current climate.” MacGillivray said.
“A 100% interest in a regional shopping centre of this scale has not been transacted in more than five years nationally,” MacGillivray said. “ Acquisition opportunities of this scale seldom come to market. While the sub-regional sector was particularly active, we are now seeing renewed investor confidence and purchaser engagement for larger retail assets. The sale of Wollongong Central is a show of strength for Australian retail investment in the current climate.”
“We are very pleased with the acquisition of Wollongong Central, being part of our strategic plan to identify strong retail investments with opportunites for mixed use upside,” Ben Finger, managing director of Haben, said.
“Wollongong provides an attractive alternative for professionals and white collar industries within an hour’s drive of the Sydney Airport. Wollongong Central is a landmark investment opportunity within the Wollongong City Centre, which is the major retail, commercial, entertainment and administrative hub of the Illawarra region.
“Major tenants David Jones, Coles and Target provide security of income and a key point of difference to competing centres within the trade area. Wollongong Central is the preeminent destination within the region for nationally recognised brands, with 91% of the GLA being occupied by national or chain tenants.” Finger said.
Other recent major deals include Vicinity Centres acquiring a 50% interest in Harbour Town Outlets Gold Coast from Lendlease’s Australian Prime Property Fund Retail for $358 million.
Hong Kong’s Link REIT is speculated to be eyeing off as much as $550 million worth of stakes in Sydney CBD shopping centres The Queen Victoria Building, The Galeries and the Strand Arcade from Singaporean fund GIC.
Australia’s retail market activity has been dominated of late by neighbourhood shopping centres, convenience centres and large format complexes that have performed strongly and continued to stay open through the pandemic, although sub-regionals – the “middle child” – have also seen a resurgence, according to Real Capital Analytics’ Ben Martin Henry on Australian Property Journal’s Talking Property podcast.
