Sydney-based Revelop is backing its belief in the retail property resurgence by picking up Stanhope Village in Sydney’s northwest from Mirvac for above book value price of $158m.
The group has been buying up well-located subregional shopping centres and applying its active management style to ride still strong consumer spending.
Subregional centres performed well during the pandemic and they are in demand from investors, even as large regional assets are harder to shift.
Revelop has been expanding its retail portfolio by both picking up centres and also building up its own development pipeline.
Stanhope Village is the second asset the private player has picked up from Mirvac. It last year swooped on the Tramsheds Sydney complex in inner-city Forest Lodge for about $52m, backing its confidence that food trade would pick up. And Revelop has since introduced new outlets.
Revelop managing director Charbel Hazzouri said the latest property was a unique offer in terms of land area, tenancy mix and location.
He said the private firm’s acquisition and development of centres across Sydney – its holdings span Chisholm, Wilton, Calderwood, Frenchs Forest, Gladesville, Smithfield, Parramatta, Emerton, Lidcombe, Lachlan’s Line North Ryde, Box Hill and Dural – were linked.
“That link is convenience-based centres that offer a one stop complete shop that serves its local market. In all cases, there is convenient at grade parking, a large proportion of essential and daily needs non-discretionary spend, plus a lifestyle and/or a leisure offering such as outdoor dining, kids entertainment, gyms and swim schools and the like,” he said.
“Our centres give back to the community by ensuring they are an enjoyable and notable meeting place.” But there was a commercial focus.
“The future of retail is much like its humble beginnings – the focus is on single storey, simple to navigate and easy to use centres,” Mr Hazzouri said. “The mega centres that have evolved in the last 30 years have a purpose, but the place of medium to large convenience centres, neighbourhood or subregional, primarily 5000-20,000sq m, offer everyone the best experience.”
He argued they were at the point where landlords could offer customers everything they needed, without cannibalising tenant sales by duplicating uses to fill space.
The purchase of Stanhope Village was brokered by JLL’s Nick Willis and Sam Hatcher in an off-market process. It showed a $4m premium to the centre’s June book value, reaffirming the current split between prime and secondary retail assets.
The centre is anchored by Coles, Aldi, and Kmart, and backed by 75 specialty stores. It sits on a 5.33ha landholding and has 18,063sq m of gross lettable area.
Developed and held by Mirvac for almost 20 years, Stanhope Village adds to Revelop’s holdings in Sydney’s fast-growing northwest corridor.
Mr Willis said full interests in prime metropolitan subregional assets were rarely traded. “Stanhope Village reflects only the sixth freehold metropolitan Sydney subregional of scale to have sold in the last decade,” he said. “Assets like this continue to attract a strong weight of capital in the current environment given the strong trading performance and investment fundamentals, including long-term mixed-use development opportunities.”
Despite fears discretionary spending will come under pressure from an economic slowdown, the assets appear insulated.
“While the market continues to find clarity on the outlook of the economy, investor demand for subregional stock remains elevated as evident by total transaction volumes being $2.7bn for 2022, 74 per cent above the five-year average and just shy of 2021’s record-breaking transaction volumes,” Mr Hatcher said.
Ben Wilmont
The Australian
23/02/2023