Perth-based syndicate buys into NSW large format market

Tuggerah_Central_shopping_centreA Perth-based syndicate has capitalised on ongoing strength in Australia’s large format retail market, divesting Tuggerah Central on New South Wales’ Central Coast for $10.8 million, reflecting a significant uplift since the asset last transacted 12 months ago.

Properties & Pathways first purchased the 4,118sqm large format retail complex in June 2016 for $7.54 million. The most recent transaction represented a yield of 6.5 per cent – a record yield for the state’s regional Large Format Retail sector.

Located in Tuggerah – one of the Central Coast’s fastest growing suburbs – the complex is anchored by Officeworks and Nick Scali.

“We identified a small window of opportunity to activate redundant GLA in a neglected asset and engaged a proactive plan to turn the asset around,” said Properties & Pathways managing director Cal Doggett.

“We had a strong vision for the centre and firmly took the reins to drive this outcome with a reinvigorated signage and facade upgrade, which enabled us to attract and secure the right tenant.

“The turnaround of the asset was in line with our core strategy and delivered our investors an exceptional return. We are continuing to experience strong investor demand looking to participate in our syndicates – this is spurring along a robust pipeline of deals, which are mainly focused on the east coast of Australia.”  

CBRE Retail Investments’ Nick Willis and Justin Dowers who negotiated the sale in 2016 and now again in 2017 said the sale highlighted strengthening investor interest in the large format retail sector.

“Our recent campaigns have highlighted a real shift of investors who are now actively pursuing large format retail assets,” said Dowers.

“Investors are continuing to look further abroad in pursuit of premium returns, with large format retail transacting on average 50 to 150 basis points higher than that of core supermarket retail based investments,” Willis added.

“The sector has strengthened, being driven by the continued performance of household goods retailing, population growth and the evolution of retailers with centres now largely weighted to strong national and publicly listed companies.”

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