Private group Revelop has swooped on the Tramsheds Sydney complex in inner-city Forest Lodge, picking up the centre from developer Mirvac for about $52m in a sign of its confidence that food trade will pick up.
The centre was offloaded by the developer at a 53 per cent premium to its book value and Revelop is confident it can further lift its performance as the market swings back in wake of the pandemic.
It will also draw on its skills in repositioning assets and in services to boost the centre’s income in line with its strategy of improving prime retail assets.
Tramsheds is well-known as the iconic restoration of a historic former tram depot and the centre will be reoriented to further serve locals, including residents of Mirvac’s 1300 apartment precinct.
Tramsheds sports an eclectic mix of high-profile eateries, in addition to a local supermarket and services in a bespoke heritage setting. It has been a resilient trader through two years of sporadic lockdowns and the bustling centre already attracts more than 40 per cent of foot traffic from outside of its local area.
JLL senior directors Nick Willis and Sam Hatcher brokered the deal on the 23,194sq m site.
The Tramsheds comprises 5952sqm of gross lettable area which is underpinned by 98.8 per cent occupancy. Three-quarters of tenants are national or chain operators.
Revelop director Anthony El-Hazouri said the Tramsheds building had incredible aesthetics. The purchaser will look to bring in more service- based tenants with Mr El-Hazouri hoping to give customers more of a “full one-stop shop” rather than occasional dining.
The developer, who will take a light touch, also hopes to improve its interface with the adjoining park to open it up for families. “For years we’ve taken our kids to the park,” he said.
Revelop typically buys assets which require work but Tramsheds only requires a strategy tweak. The company has 16 shopping centres in NSW, Victoria and SA alongside its childcare centres, boarding houses, and residential holdings.
The crisis has tested the market but Revelop has kept to a simple model.
“For us, it’s all about the convenience factor – whether a shopping centre is successful or is not successful is purely on the basis of convenience in our view,” Mr El-Hazouri said.
He is optimistic as customers return “It’s all about bringing people back through the doors – (and) not just coming back through the doors but also being comfortable once they’re inside that they’re going to stay for long periods of time.”
“There’s no benefit for our specialty retailers if people only go in and out to the supermarket. For us, it’s about people regaining confidence to linger at shopping centres and to be comfortable spending their money.”
Mr El-Hazouri is hoping that as normality returns in coming months, tenants will have the opportunity to return to the successful times like pre-Covid.
“It really is about us doing what we can as a centre to bring people back through those doors and spend money at that centre,” he said.