This article originally appeared in Australian Financial Review
Boutique fund manager Real Asset Management (RAM) has grown the value of its Australia Retail Property Fund to $300 million after acquiring its 11th convenience-based mall in less than two years.
RAM acquired the Hub Westlake shopping centre in Brisbane’s Western suburbs for $10.5 million from Alan Porter and Philip Rhodes’s A&P Property Holdings in an off-market deal negotiated by Jacob Swan and Sam Hatcher from JLL.
Led by ex-UBS investment banker Scott Kelly, RAM has been buying up neighbourhood shopping centres on yields above 7 per cent that offer value-add potential, investing funds on behalf of high net worth investors.
The recently refurbished single-story shopping centre, anchored by an IGA supermarket and nine specially tenants, including BWS and Pool Mart was acquired on a fully let initial yield of 7.1 per cent. The 4848 sqm site is zoned to allow a development of up to three stories.
RAM head of real estate, Will Gray said the centre was an excellent addition to the $300 million RAM Australia Retail Property Fund.
“The centre is well supported by a residential catchment of almost 5000 people and will continue to benefit from strong local population growth, as well high barriers of entry for competing offers,” he said.
Mr Gray said RAM would continue to look at opportunities to deploy capital in a number of different real estate sectors on behalf of its growing client base, including residential developments, CBD office buildings and smaller commercial properties where it could add value.
Mr Kelly told The Australian Financial Review in February he believed convenience malls would thrive amid the current malaise affecting retail property more generally.
“You either want to play at the top end of the market – the super regional malls – or those at the other end, the supermarket-anchored neighbourhood malls, which will always have a place near the top of the retail property hierarchy,” he said.
“Where you don’t want to be is in the middle – the regional malls exposed to sectors like apparel.”