Invesco Sells Northern Beaches Shopping Centre for $100m

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A local investor group has picked up the Forestway Shopping Centre in Sydney’s north for $100 million as suburban malls hold their value despite headwinds in the broader retail sector.
The shopping centre, 13km north of the city alongside Sydney’s northern beaches in Frenchs Forest, was sold to Revelop in an off-market transaction.

The sale to the Parramatta-based investor, brokered by JLL’s Nick Willis and Sam Hatcher, was struck at a price which reflected a fully leased yield of 5.37 per cent.
The deal price represents a cap rate in the low 5 per cent range.

Revelop, known for both commercial investments and residential development, will now become the precinct’s biggest private landowner.

Among its development projects, Revelop has previously partnered with co-living operator Hmlet on four facilities in Sydney’s west, Northern Beaches and Petersham in Sydney’s inner west.

Forestway has close to 10,000sq m of retail and office space, two major supermarkets and numerous specialty stores.

Revelop’s immediate plans are to improve the parking, appearance and tenancy mix at the mall.
US investment giant Invesco acquired the shopping centre, which was developed in 1966, in 2015. The centre is anchored by two supermarkets—Aldi and Woolworths—and a McDonald’s.

The shopping centre was part of Invesco’s $4-billion Asia core fund. Proceeds from the sale will be reinvested into that fund’s activity across the region.

“Private investor and syndicator capital represented more than 40 per cent of all purchasers in the past 12 months,” Willis said.

“With increased confidence in the market they are now moving up into a new price cohort and now seeking larger scale deals.”

Hatcher said new capital sources were now emerging to absorb some of the institutionally owned assets, driven by the opportunistic timing, attractive yields and longer-term potential for re-development.
“A key constraint will be the continued inability to travel for property inspections from offshore and the lack of clarity on income reversions and rent collections.

“These two factors are encouraging and cementing more joint venture partnerships and passive (indirect) investments by offshore investors with local specialist managers, a trend we expect will continue,” Hatcher said.

The acquisition comes a week after the Northern Beaches Council rejected a $114-million redevelopment proposal Invesco put forward two years ago.

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