In a move away from its previous 2016 strategy of participating in the apartment development game, Stockland quietly disguised the sale of a site in Toowong, Brisbane as a non core retail asset.
Stockland announced this week that they had disposed of two retail assets, the Cleveland shopping centre and their Toowong retail and commercial assets for $143M. Their Cleveland asset had been reported in January as being sold to the Haben Group at $103M, allowing us to assume that Toowong was sold for circa $40M.
According to the Stockland website, the properties in Toowong comprise 80-88 Jephson, 23 and 27-29 High Street. The Jephson Street asset includes a five-level 7,887sqm office building with a WALE of 1.9 yrs and was valued in June 2018 at $23.7M . The High Street assets comprise a number of commercial and retail buildings (one previously occupied by Woolworths) which were held by Stockland at circa $6.9M in Dec 2017.
Little was said this week about the Toowong asset, however Stockland had clearly positioned this asset as a residential apartment project. Stockland obtained a Development Approval in 2017 for the redevelopment of the part site for three 25 storey residential towers containing a total of 530 new apartments and extensive ground floor retail activation.
At the time, Stockland identified Toowong as one of the strongest markets for owner-occupiers of apartments in Brisbane and Mark Steinert has said: “Our proposal to undertake this mixed used apartment and retail development in Toowong aligns with our strategy to broaden our residential business and customer reach with an initial focus on sites within our existing portfolio". Clearly with the oversupply of Brisbane apartments (now unwinding) changed Stockland's strategy for the site.
The buyer of the site is undisclosed, however the immediate play would be to lease up the commercial building and undertake a quick re-sale of the Jephson St asset to sit on the balance of the site as a future residential development whilst generating high street retail rental income.
Quite a good opportunistic purchase I suspect. The sale was handled by CBRE.