Bathurst Large Format Retail Centre Transacts for $31.5 million

Sydney-based property fund manager Argus Property Partners, working in collaboration with development and investment firm Kaipara Property Group, has sold a large format retail complex in Bathurst for $31.5 million to a private consortium represented by Precept Property Partners and Stabilprop Investments.

CBRE’s James Douglas exclusively managed the off-market sale process for HomeCentre Bathurst.

Mr Douglas said the asset offered strong underlying investment fundamentals and opportunities for growth.

“The sale process was highly competitive, with investors looking through recent market headwinds to an improving outlook for both retail sales and the cost of finance,” Mr Douglas said.

“LFR assets are traditionally tightly held and rarely traded, with investors attracted to the strategic landholdings that these centres typically occupy and the potential for future development. They also offer transparent and reliable cashflows, with strong in-built rental growth and high expense recoveries, providing a sustainable base for income growth.”

Argus Property Partners Executive Director Braith Williams noted, “The repositioning strategy for the asset was successfully implemented and the divestment is in line with the Fund objectives. Argus and Kaipara collaborated to execute a strategic leasing program with new leases to national chain retailers including Harvey Norman, Amart Furniture, Eureka Street Furniture, Cheap as Chips, Jaycar and World Gym, which is due to open shortly. The asset also includes Spotlight and Petstock stores.”

Kaipara Property Group’s Joint Managing Director Toby Daniel added, “We are very pleased with the leasing and delivery results which has set the asset up for a strong future and provides a diversity of popular retailers for the people of the Bathurst region.”

Precept Property Partner’s Director Grant Traub said, “The acquisition represents our first step into the retail sector. It’s a well-managed asset, which has the opportunity for further value enhancement through active management and strategic leasing to drive returns.”

Home Centre Bathurst occupies a land-rich 52,050sqm site on the highly trafficked Great Western Highway within the Bathurst bulky goods precinct.

The centre is surrounded by a mix of modern and older style commercial developments which include tenants such as Fantastic Furniture, BCF, Total Tools, OMF, and 1825 Furniture – creating a critical mass of LFR retailers for customers within the immediate precinct.

The asset’s established customer base and total trade area of 124,455 residents is forecast to grow by 1.0% p.a. (almost double the NSW non-metro average) to reach 149,185 by 2041.

The trade area comprises an affluent population, with average per capita and household incomes 4% and 6% respectively above the non-metro NSW benchmarks. This drives significant LFR spending of $446.3 million, with forecast growth of 3.3% p.a. to reach $781.9 million by 2041.

The transaction is the second major retail deal to be completed in Bathurst in the past 12 months, following the $17.5 million acquisition of the Bathurst Chase shopping centre by Sydney-based property and development firm Mintus. That sale was also handled by CBRE.

Mr Douglas said Home Centre Bathurst was one of only a handful of recent LFR transactions, with just seven centres sold nationally in 2023 for a total of $368 million.

“LFR assets are positioned to continue to perform well over the next few years,” Mr Douglas said.

“With minimal new developments over the past two years and extremely tight vacancy persisting for prime grade assets, rental growth is set to outperform most sectors. A likely reversal of interest rates in the second half of 2024 coupled with record population growth is expected to underpin ongoing investor interest in the asset class.”