This article originally appeared in Real Estate Source.
Real Asset Management has divested three small suburban Brisbane shopping centres at or above book value to separate private investors.
The deal includes The Hub Westlake, which we reported in September traded for $11.46 million.
Combined with two more malls – Windaroo Village and the Nightowl Convenience Centre, at North Lakes – the manager, which held the assets in the Essential Services Property Fund (REP), is reaping $32m.
“The success of the transactions underscores the resilience of essential retail assets despite interest rate pressures and reflects the ability for RAM to continue with its capital recycling strategy in a challenging capital markets environment,” executive director and head of Real Estate, Matthew Strotton, said.
“We consistently make prudent and proactive portfolio and capital management decisions for REP,” he added.
“The ability to sell all three assets at attractive pricing in these market conditions underscores our capability,” he added.
“RAM is…prepared to move nimbly on growth opportunities as they emerge and is confident about the progression of its 2024 agenda which was flagged to REP’s investors during recent roadshows,” according to the executive.
The assets
About 16 kilometres south west of Brisbane’s CBD, The Hub Westlake traded at a six per cent yield, considered low for the sector and reflecting the high proportion of essential service tenants including a dentist, GP clinic, pharmacy, swim school and pool equipment supplier.
The weighted average lease expiry is 8.3 years.
The buyer is Sydney based.
RAM paid $10.075m in 2018.
Windaroo Village meanwhile, on the north east corner of Beaudesert-Beenleigh Road and Carl Heck Boulevard – with 1597 sqm including a small supermarket, surrounded by 95 car parks, cost the fund manager $6.5m – a 10.5pc return – eight years ago.
The Night Owl set it back a similar amount – $6.7m demonstrating a seven per cent yield – in January, 2017.
On 4517 sqm at 1 College Street, at the north east intersection of Discovery Drive, it contains 10 specialty stores and 60 car parks.