RAY White Invest has jumped over investors' ‘Centro hysteria’ hurdles to buy the Currambine Marketplace in Perth for $50 million from Woolworths.
Ray White Invest, the funds management arm of the Ray White Group, managed raise the funds from nervous investors to buy the shopping centre in a joint venture with retail property developer, the Blair Group.
The shopping centre was purchased on a net yield of approximately 6.5% and has paid $9 million for the surplus land surrounding the property.
“What has been gratifying about this purchase has been the preparedness of professional investors to coolly evaluate this retail opportunity on its merits and not be sideswiped by the recent hysteria created by Centro’s problems,” Ray White Invest’s chief executive Dan White said.
“We always maintained a deep-belief in the quality of this proposal right from the time, last November, when we conditionally acquired this property.” White added.
“The Currambine acquisition represents a strong outcome for Ray White Invest and its investor partners.
“Our wholesale fundraising program undertaken over recent weeks was closed over-subscribed. Our investor partners recognise the strong fundamentals of the property, the unusual combination of covenant strength and development potential,” he continued.
Located in Currambine, 30kms north of the Perth CBD, the single level neighbourhood shopping centre is currently anchored by a Woolworths supermarket, together with Woolworths petrol, 30 shops and a 6-plex cinema.
The joint partners have proposed to expand the centre which currently sits on 7.5ha of land of which 2.5ha is surplus developable land.
“The reconfiguration and development plans prepared by Blair Group were critical factors in Woolworths agreeing to sell the property to the joint venture. Woolworths has strongly endorsed the plans and development team assembled by the joint venture,” White added.
Woolworths owned liquor outlet chain Dan Murphy’s has committed to the new development, with a 1,400 sqm tenancy to be constructed as part of a 10,000 sqm expansion.
On completion of the first stage of the development works, the property will have approximately 20,000 sqm of retail space with an end value of circa $100 million. Woolworths tenancies will comprise approximately 30% of net income on completion.
“We have great opportunity to add significant value for all the stakeholders. We will introduce new retail offers and enhance existing offers underpinned by existing retail demand in the trade area,” Blair Group’s managing director Jason Blair said.
“We have developed a strong relationship with Woolworths by approaching development from a long-term retailing perspective. We look forward to working with our partners to add significant value for our investors, tenants and the local Currambine community,” Blair concluded.
Australian Property Journal
