After a strategic left-field move to claim a stake in an online discount retailer earlier this year, property giant Mirvac is continuing a $1.3-billion asset sell-off to reposition and strengthen its bricks-and-mortar portfolio.
It has pocketed $158 million from its latest divestment, the sale of a sub-regional retail asset in Sydney’s fast-growing north-west corridor.
The ASX-listed developer has offloaded Stanhope Village shopping centre, tapping into the elevated weight of investor capital seeking to deploy into counter-cyclical, value-add retail opportunities.
Its is part of an overall cleansing of Mirvac’s $7.86-billion portfolio with a view to refining its quality and recycling capital into its “next generation of assets”.
The high-performing centre in Stanhope Gardens has been purchased by Sydney-based property group and acquisitive retail investor Revelop on a yield of about 5.5 per cent.
Its divestment by Mirvac follows the company’s reported strategic investment in online discount fashion retailer The DOM earlier this year.
Online shopping in Australia has grown on average 18.1 per cent per year since 2018 and Mirvac’s digital play is aimed at leveraging its advantages by enabling retail partners in its centres to list products on The DOM to expand their customer reach and provide an additional revenue stream.
Meanwhile, Mirvac’s recent first-half results noted it had made “good progress” on its asset sales program with deals worth about $445 million struck in the period as it accelerated its portfolio repositioning “towards prime, modern, sustainable resilient assets”.
“As well as enhancing the quality of our market leading portfolio, [the asset disposal program] allows us to invest in the creation of our next generation of assets,” outgoing chief executive Susan Lloyd-Hurwitz said.
She added: “While high inflation and interest rates have created uncertainty for consumers and placed pressure on economic growth, the continued normalisation of business activities, the resumption in overseas migration, and the flight to high-quality assets place Mirvac in a strong position to navigate the current climate”.
Stanhope Village shopping centre comprises 18,063sq m of gross lettable area and is anchored by Coles, Aldi and Kmart with 80-plus specialty stores.
It sits on a 5.33ha landholding about 25km from the Sydney CBD and was developed by Mirvac and held by the company for almost 20 years.
“Stanhope Village is a true retail unicorn,” Revelop co-founder Charbel Hazzouri said. “The tenancy mix, convenience and location ensure this asset will continue to serve the community and provide for its occupants for years to come.
“Predominantly non-discretionary retailers, Stanhope has proved its relevance and importance to the local community and continues to outperform all benchmarks.”
“Its location in the northwest growth corridor aligns with our key greenfield retail sites across the north-west and Sydney metro basin. We are excited to build upon this incredible asset over years to come.”
The transaction was negotiated off-market by JLL’s Nick Willis and Sam Hatcher.
Willis said Stanhope Village was only the sixth freehold metropolitan Sydney sub-regional retail centre of scale to have sold in the past decade.
“Assets like this continue to attract a strong weight of capital in the current environment given their strong trading performance and investment fundamentals,” he said.
“However, investors remain very discerning on asset and geography selection.”
Hatcher said the transaction reflected the current bifurcation between prime and secondary retail assets as investors continued to seek quality assets with significant landholdings in key growth locations.
“While the market continues to find clarity on the outlook of the economy, investor demand for sub-regional stock remains elevated,” he said.
The Urban Developer