Property group nabs major centres for $436m
The large format retail specialist has acquired Home Hub Castle Hill for $336 million at a fully leased yield of 5.50 per cent and Home Hub Marsden Park for $100 million at a fully leased yield of 6.00 per cent.
Simon Rooney, JLL’s head of retail investments in Australasia negotiated the deal, which represents a weighted average capitalisation rate of 5.60 per cent.
Rooney said the strong performance and high growth aspect of the assets resulted in significant investor interest from international investors, domestic institutions and a range of high profile private investors throughout the campaign, which closed late last week.
He said the deep investor pool was attracted to the long-term potential and the high population growth outlook for both assets, given their strategic location, positioned within Sydney’s north-west corridor – one of Australia’s strongest growth precincts.
Encompassing over 50,000sqm of retail area, Home Hub Castle Hill, is the largest and most dominant large format retail centre in the trade area. Home Hub Marsden Park sits within the Sydney Business Park development, forming a major retailing hub together with Bunnings, Ikea, Aldi and the soon to be completed Costco.
“There is a very limited number of major, core assets in the LFR sector across Sydney, so these presented a rare opportunity to acquire significant scale in the sector,” Rooney said. “The sale of Home Hub Castle Hill and Home Hub Marsden Park was the largest homemaker transaction in Australia’s history.”
Rooney said the yield achieved resets the benchmark for premium large-format retail assets and represents a new record low for the sector.
“For this particular transaction, investors were forward buying growth by pricing in the potential for strong cash flow and rental uplifts,” he said. “The fundamentals of both assets are well supported by population growth in each catchment of 1.8 per cent for Castle Hill and 2.1 per cent for Marsden Park.”
“The result will fuel further activity in the sector in 2017,” he added.
The portfolio was marketed by JLL on behalf of LaSalle Funds Management Limited (LaSalle Australia Club Investment Trust) in conjunction with McVay Real Estate.
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