This article originally appeared in Australian Financial Review
Sydney-based Real Asset Management has bought the Broadway Plaza at Punchbowl in Sydney’s south-west for $41.2 million.
The shopping centre was completed in 2013 and was under the control of PPB Advisory through a receivership.
With a fully leased income of $3.3 million, the deal represents a yield of about 8 per cent.
The mall is anchored by a full-line Woolworths supermarket and BWS on a 20-year lease. Also in the shopping centre are three mini-majors, 27 specialty shops and two ATMs. The total space comprises 8455 square metres.
Will Gray, head of real estate at RAM Group, said the acquisition was in line with the company’s retail strategy along Australia’s eastern seaboard.
“We are delighted to have secured a recently developed shopping centre in the tightly held Sydney metropolitan area for our investors on attractive terms,” he said.
“The fundamentals for the centre looking forward are exciting and challenging, and we will certainly need an active and concentrated approach to execute on our strategic long-term plan to deliver maximum value to our investors.”
RAM has been an interested player in NSW in recent months, buying Alceon and partner CP Retail’s Ballina Central shopping centre on the NSW north coast for about $45 million in October last year.
In July last year it snapped up the Keppel Bay Plaza in Yeppoon, on Queensland’s central coast, for $28.1 million.
RAM pools funds from Asian ultra high net worth foreign investors, currently worth $400 million.
With debt, RAM is targeting $300 million investments in defensive non-discretionary backed retail centres. With the Broadway purchase, RAM has already achieved $150 million of that target. Colliers International’s James Wilson and Matthew Meynell brokered the Punchbowl deal in conjunction with Philip Gartland and Lincoln Blackledge from Stonebridge Property Group.
“This benchmark result highlights the huge appetite for NSW neighbourhood shopping centres,” Mr Wilson said. “The campaign demonstrates the ability of prudent retail investors to constantly review their hurdle rates, in line with the evolving market conditions, in order to deliver on their investment strategy.”