Elanor Investors Group have agreed terms with Blackstone for the acquisition of Warrawong Plaza for $136m.
The acquisition reflects an attractive 7.75% fully leased yield and $3,143 per m2 of lettable area, well below its replacement cost.
Blackstone acquired the Centre which included an adjoining Bunnings and bulky goods precinct in 2017 from SCentre for $371m. In November 2020, Blackstone sold the Bunnings and Bulky Goods site to Griffith Capital for $35m. The deal with Elanor crystallises a significant loss for Blackstone on the troubled asset.
In late 2020, Sydney-based investment firm Panthera Property Group was reported to be undertaking due diligence on the Centre at a price of about $160 million.
Elanor will establish a new Fund to hold the asset.
ENN CEO, Glenn Willis, said: “Following our recent acquisition of Clifford Gardens we are pleased to have secured another high-quality retail asset located in a region with strong economic fundamentals. This investment provides a further opportunity to build on our successful track record of repositioning sub-regional shopping centres into strongly performing, non-discretionary focused retail assets.”
Warrawong Plaza is a double supermarket centre catering to the everyday needs of its catchment. Located in Wollongong, NSW’s third-largest city, the Centre is situated on a prominent 7-hectare corner site with main arterial road exposure to over 45,000 vehicles daily.
The Centre has a long-standing position within the Wollongong retail market, providing unparalleled amenity and superior convenience to its well- established trade area. The Centre’s trade area continues to experience positive demographic change and retail growth.
Warrawong Plaza’s fully enclosed 43,000m2 lettable area provides convenient access to a wide range of retail amenity with two supermarkets, two discount department stores, 9 mini-major and 80+ specialty retailers focused on non-discretionary, every-day needs goods and services.
The Fund’s intends to repositioning the Centre with the introduction of a new full-line Woolworths supermarket to transform Warrawong Plaza into a strongly performing triple supermarket, single discount department store centre – the only centre in Greater Wollongong with all three major supermarket brands (Woolworths, Coles and ALDI).
ENN’s Co-Head of Real Estate, Michael Baliva, added: “The execution of the Fund’s repositioning strategy will transform Warrawong Plaza into the only triple supermarket anchored centre in the Wollongong region, providing a key point of difference to other retail centres in the trade area. The repositioning strategy will also improve the Centre’s occupancy, trading performance and lease expiry profile to enhance its income and deliver a strong uplift in capital value for Fund investors.”
ENN’s Head of Retail, Development and Mixed Use, Matt Healy, added: “We are pleased with the Fund’s repositioning strategy to replace an underperforming discount department store with a new full- line Woolworths supermarket and e-commerce fulfilment facilities. The introduction of new child-care, gymnasium, personal and allied health services will further improve the Centre’s convenience-based offering focussed on every-day goods and services.”