US investment giant Invesco has sold out of Forestway shopping centre in the northern Sydney suburb of Frenchs Forest to private platform Revelop in a $100 million deal.
The divestment comes at around a 10 per cent discount on the price Invesco paid when it acquired the neighbourhood centre from the GPT Wholesale Shopping Centre Fund in 2015 for $112 million.
The yield on the transaction, brokered by JLL agents Nick Willis and Sam Hatcher, was around 5.75 per cent, sharper than when it was acquired six years ago at an initial yield of 5.97 per cent. On a capitalisation rate, the deal price represents a rate in the low 5 per cent range.
For Invesco, the deal is an opportunistic exit, with the sale understood to be a considerable premium to the small mall’s book value. The asset itself makes up just a fraction of the $4 billion portfolio in Invesco’s Asia core fund. Proceeds from the sale will be reinvested into that fund’s activity across the region.
In Australia, Invesco manages somewhere between $3 billion and $4 billion across various forms of real estate. Its last acquisition was finalised more than a year ago, when it took a half stake in the $800 million headquarters of Chevron in Perth, which is being developed by Canadian property giant Brookfield.
On the buy side of the Frenchs Forest deal is busy private investment platform Revelop, which is taking “a very optimistic outlook” on neighbourhood shopping centres that are “well located, convenient and offer a truly one-stop shop customer experience”, director Charbel Hazzouri said.
“As with all our property transactions, Forestway was a strategic acquisition that allowed us to build on an established local centre that offered vast upside opportunities without detracting from the convenience that makes Forestway a favourite with our locals,” he said.
Among its development projects, Revelop has previously partnered with co-living operator Hmlet on facilities in Sydney.
Forestway has close to 10,000sqm of retail and office space, anchored Woolworths and Aldi malls, along with numerous specialty stores.
Revelop’s immediate plans are to improve the parking, appearance and tenancy mix at the mall.
“Once the plans are finalised, we will commence a staged delivery focusing on expansion and improvements of our current tenants, introduction of new tenants to improve the mix and experience and look to the larger scale improvements,” Mr Hazzouri said.