CIP Asset Management has sold a 50% stake in a Sydney shopping centre to JY Group for $167 million amid a flurry of retail property investments across Australia this year.
The buyer purchased the stake in the Roselands shopping centre, which is located 16km south-west of the Sydney CBD and has 63,344sqm of gross lettable area.
Built in 1965, the shopping centre is anchored by Myer, Woolworths, Coles, Aldi and a new Kmart discount department store, which recently replaced Target.
The asset recently underwent a $90 million redevelopment and upgrade to the ground floor fresh food precinct, comprising new fresh food and specialty food retailers, a new Aldi, a refurbished Coles and a new Woolworths.
“Located within an extensive and well-established trade area, it provides an immediate opportunity to create a truly mixed-use town centre precinct, given the sizeable site area of 14.3ha, prominent metropolitan location and ready access to public and private infrastructure,” said CBRE Head of Retail Capital Markets, Pacific, Simon Rooney, who negotiated the sale on behalf of the seller.
“JY Group strategically acquired the asset off-market prior to a formal campaign commencing, with the price reflecting a material premium to the most recent external book valuation and a continuing shift in investor sentiment towards premium retail investment opportunities.”
The buyer already owns three Melbourne shopping centres, having teamed with Mulpha Australia to acquire Brimbank shopping centre for $153 million in 2019.
JY Group also partnered with property funds manager Haben to buy Casey Central from M&G and Stockland The Pines for $225 million and $155 million respectively.
The transaction comes as almost $4.52 billion flowed into Australian retail property investments during Q2 and Q3 this year, up 118% on the same period in 2020, according to CBRE.
The momentum has continued into the fourth quarter of this year with UniSuper and Cbus Property recently teaming up with AMP Capital to take majority ownership of Pacific Fair on the Gold Coast and a half stake in Sydney’s Macquarie Centre in a $2.2 billion deal.
“Retail is the real mover at present, with at least another $2 billion in assets expected to change hands this year,” Mr Rooney said.
“The comparative returns and value proposition is clearly compelling, with major owners now able to competitively rebalance portfolios, allowing incoming investors to strategically acquire some of Australia’s best retail assets.
“This return of institutional capital into the sector, combined with strong private investor demand, will see heightened transactional activity into 2022.”