Sydney

Perth-based syndicate flips NSW retail centre

A 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.

18 Jan 2018

A 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% - 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. 

Properties & Pathways Managing Director Cal Doggett said Tuggerah Central represented a perfect positional play for the company. “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. We had a strong vision for the centre and firmly took the reins to drive this outcome with a reinvigorated signage/façade 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. 

Mr Dowers commented “Our recent campaigns have highlighted a real shift of investors who are now actively pursuing large format retail assets. Proactive managers such as Sentinel and Property & Pathways have been able to position these centres to now appeal to a risk adverse investors that see long term and value in the sector.” 

“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,” Mr Willis said. 

“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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CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.