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News release

Australia

Charter Hall sells Melbourne homemaker centre Home HQ Nunawading for AUD 48 million to Arkadia Group

High-yielding bulky assets are in demand with investors, with over $218m exchanging hands in the last 6 months


AUSTRALIA, 15 JULY 2013 – Acting on behalf of Charter Hall, Simon Rooney of Jones Lang LaSalle has exclusively negotiated the sale of Home HQ Nunawading for AUD 48 million, which reflects an initial fully leased yield of 11.3%.

Completed in 2006, Home HQ Nunawading is the dominant homemaker centre in Melbourne’s eastern suburbs. Its three anchors are Nick Scali, The Good Guys and Bev Marks Beds, together with 17 major retailers including Sony Centre, Howards Storage World, JB Hi Fi, Lincraft and South Pacific Health Club.

According to Australian Head of Retail Investments at Jones Lang LaSalle, Simon Rooney, many major institutions have been reducing their exposure to ‘non-core’ retail assets – particularly in the bulky goods sector.

“Since 2007, institutional landlords have disposed of over $1.15 billion of homemaker centres in 39 separate transactions.

“Private investors have been the most active buyers, and have accounted for almost half of all deals since 2007 (47%), followed by unlisted funds at just 23%.”
 
Privately owned investment organisation Arkadia, which specialises in the ownership and management of homemaker centres acquired the property in the company’s first move into the Victorian market.
 
Mr Rooney said a small number of specialist private investors and syndicators have been very actively building bulky goods portfolios, comprising of high-quality and high-yielding homemaker assets across the country.
 
“Yields in the bulky goods sector remain very high by historical standards, and offer investors potentially very attractive returns for those willing to move up the risk curve and take a counter-cyclical position.”
 
“Major players include Brett Blundy (BBRC), Arkadia, Sentinel and more recently Altis and Blackstone”.
 
According to Jones Lang LaSalle Research, the drivers of the bulky goods sector are improving. The cuts to official interest rates are positive for a recovery in residential construction, which is a key driver of the performance of the bulky goods market, and also have positive implications for the broader retail sector.
 
Jones Lang LaSalle Research shows yields for bulky goods centres currently range between 8.50% and 11.00% (as at March 2013) compared with the 10 year long term average of 7.75% - 10.00%.
 
Home HQ Nunawading has a total Gross Lettable Area (GLA) of 22,871 sqm and is located on the easily accessible landmark site known within the homemaker precinct as the “Golden Mile”.
 
The centre’s main trade area (MTA) is 729,000 persons including approximately 118,100 residents in the primary sector.
 
For more information about Arkadia, visit www.arkadia.com.au