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News release

Sydney

Belrose Supa Centa in New South Wales sells for $88 million

The homemaker sector has been through a transition phase since 2008, with a major shift in the ownership profile of centres from institutional landlords to private investors


SYDNEY, 21 AUGUST 2013 – Acting on behalf of Terrace Tower Group, Simon Rooney of Jones Lang LaSalle has exclusively negotiated the sale of Belrose Supa Centa for $88 million to BB Retail Capital.

Mr Rooney, Australian Head of Retail Investments said, “We have seen a very active homemaker centre market over the past two years, with over $544.8 million transacting in the financial year just ended, which is up 12% year on year.  Already in July and August, a further $256 million has traded so far.”

Belrose Supa Centa is a major homemaker centre north of the Sydney CBD comprising approximately 32,053 square metres of Gross Leasable Area (GLA) and 1,285 car spaces. The centre is located on a prime 4 hectare site adjoining Bunnings and is the only integrated homemaker centre on the Northern Beaches and Upper North Shore with a total catchment of 348,640 people and income approximately 28% higher than the Sydney metro average (source: MacroPlan Dimasi).

Mr Rooney said, “There continues to be a major shift in the ownership profile of the homemaker sector. The sector has been through a transition phase since 2008 and there has been a gradual transfer of ownership from institutions to private investors over this time.

Jones Lang LaSalle Research has found that 21 homemaker centres totalling $738 million have been sold on behalf of institutional landlords to private investors or developers since 2008. This figure reflects about 42% of all homemaker centre transactions over the same period.

“With many of the homemaker centres at the core end of the market having now stabilised, institutional owners have gradually reduced their exposure to homemaker centres in order to redeploy capital into their development pipelines and to pursue other ventures.

“A number of specialist private investors and syndicators have been very actively building bulky goods portfolios comprising of high quality and high yielding centres from around 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.

“Our Research shows yields for bulky goods centres currently range between 8.50% and 11.50% (as at June 2013) with mid-point of 9.60%, compared with the 10 year long term average of 8.78%,” said Mr Rooney.

According to Jones Lang LaSalle Research, the outlook for a recovery in residential construction, a key driver of household goods retailing, is now becoming even more compelling. The official cash rate was cut to 2.50% in August 2013, and a number of forward indicators such as housing finance commitments and dwelling approvals are also suggesting a recovery in residential construction and an improvement in household goods spending.  ​