Sydney LFR Sold on 5.46% Yield

9 March 2020

Altis Property Partners have sold a large format retail Centre on Parramatta Rd for $46m.


300 Parramatta Road is a 10,119sqm free standing large format retail outlet that underwent an $11m refurbishment in late 2018/early 2019.

The 17,897sqm site benefits from a 160m frontage to Parramatta Road with 10.4 million vehicles passing annually.


The Centre contains 5 retail tenancies including Officeworks, BCF and Decathlon on an 8 year WALE. The fully leased Centre is expected to generate $2.5m in net annual income. The purchase price represents a fully leased yield of 5.46% and a capital value of $4,545/sqm of NLA.


The property was acquired by an offshore investor, in a competitive ‘on market’ campaign by Colliers and Stonebridge that attracted 160 enquiries from domestic and offshore private and institutional investors and 12 formal bids. According to agents, the purchaser was prepared to proceed without a formal due diligence period.


Agents are reporting an ongoing flow of capital from Asia, particularly from Hong Kong, initially driven by the political instability and subject to how Australia handles the coronavirus, is likely to continue into 2020.


The sale by Altis, is the third Bulky Goods CEntre sales completed in the last 18 months with the 4.1ha Prospect Homemaker Centre sold to Dexus on a 7% yield in October 2019, (reflecting a rate of $2,494/sqm of NLA) and the Homemakrer Greeway Centre in Wetherill Park sold to Aventus for $112m on a 7.6% yield in September 2018, (reflecting a rate of $3,852/sqm of NLA).


In addition to Altis's deals, the Blaxland Homemaker Centre was sold in July 2019 to Metro Diversified Property for $47.5M on a 7.2% yield and the Crossroads Homemaker Centre was sold by AMP Capital for $140m to Ashe Morgan on a 6.8% yield in December 2018.


The Auburn deal is a strong result for a bulky goods centre in Sydney, a reflection of the weight of capital and the longer WALE offered by the asset.