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News release

SYDNEY

Investment activity is growing in the sub-regional retail sector

High yielding sub-regional NSW shopping centre investment opportunity Armidale Plaza is announced to the market


SYDNEY, 14 May, 2013 – Today, Jones Lang LaSalle’s Luke Harris announces sub-regional NSW shopping centre investment opportunity Armidale Plaza is on the market via an Expressions of Interest campaign in collaboration with Phil Gartland from Stonebridge.

Luke Harris, Jones Lang LaSalle’s Manager of NSW Retail Investment Sales, said he expects a high level of interest from prospective investors.
 
“Armidale Plaza is a high-yielding sub-regional shopping centre investment opportunity offering exceptional anchor tenant income security with long term leases to Kmart, Target Country and Supa IGA together with a significant point of difference from its competition with very low average gross specialty rents.
 
“Demand for sub-regional assets has certainly been growing over the past 18 months. This is being led by a wide range of buyers, including private investors, A-REITs, unlisted property trusts and more recently superannuation funds and some offshore groups.
 
“As a result of this renewed interest, sub-regional centre transaction activity has increased. We recorded AUD 983.2 million worth of sub-regional transactions in 2012 nationally, up 51% from 2011. Year to date, approximately AUD 546.2 million has been traded nationally.”
 
The most recent NSW sub-regional centre transaction was Fairfield Forum, sold by Jones Lang LaSalle in January for AUD 32 million.
 
A portfolio sale between Federation Centres and ISPT has also contributed to the strong 2013 figures. Jones Lang LaSalle’s Simon Rooney negotiated the sale of a 50% interest in a portfolio comprising four sub-regional centres and one neighbourhood centre for AUD 371.4 million in February 2013.
 
The announcement of Armidale Plaza comes against a backdrop of limited supply of new retail stock to market in NSW. According to the latest research by Jones Lang LaSalle, there was just 114,000 sqm of retail space added in 2012 across all categories.
 
The expansion of major regional shopping centres and sub-regional centres is set to become a greater proportion of new supply, as institutions continue to progress their development pipelines, according to the research.
 
Jones Lang LaSalle’s National Retail Analyst Andrew Quillfeldt said, “Retail leasing market conditions have been challenging for the past few years, but are now beginning to improve. We’re starting to see more developers moving ahead with the refurbishment and extension of major existing sub-regional centres, suggesting that owners are confident in the outlook for retail but are also responding to the competitive environment and preparing for a recovery in retail spending.
 
“Throughout 2013 and 2014, we anticipate new retail supply in NSW will be driven by the addition of new Bunnings and Masters Home Improvement stores, Woolworths and Coles-anchored neighbourhood centres and the expansion of major regional and sub-regional shopping centres,” said Mr Quillfeldt.
 
Armidale Plaza is a fully refurbished, modern and well-presented sub-regional shopping complex, comprising K Mart, Target Country, Supa IGA, a mini major (Dollars and Sense), 51 Specialty shops, 2 kiosks, 2 ATMs and 10 commercial offices. It has a total Gross Lettable Area (GLA) of 16,880 sqm.
 
“The low average specialty rents of only $463 per sqm gross offers a significant point of difference from competition, and allows immediate value add via tenancy remixing,” said Mr Harris.
 
The centre is located in a prime, busy CBD area and offers fully leased net income of circa $3,000,000 per annum.
 
Expressions of Interest close on Thursday, 13 June 2013.