Newtown Central, a highly desirable convenience retail centre located only five kilometers from Sydney’s CBD has been purchased by Fort Street Real Estate Capital for $26.25 million. The modern three-level retail centre was completely refurbished in 2009 and includes a solid lease profile including Foodworks, Fitness First and Cellarbrations.
James Wilson of Colliers International who brokered the sale commented,”the strong result highlights the appetite for Sydney metropolitan neighbourhood shopping centres under $50m. Purchasers are satisfied paying strong market pricing for assets in quality locations that provide future upside”.
Joey Fridman, Chief Executive of Monash Private Capital who sold the asset, said "Although we have owned the asset for a relatively short period, we have actively managed to add significant value to the asset and income stream. We are very pleased with the result and have capitalised on the strong demand for quality inner city assets which are in scarce supply".
Featuring a prominent location on the popular King Street, the centre also benefits from its close proximity to Newtown train station. With its strong convenience offering in a vibrant metro hub in Sydney’s growing inner west, Newtown Central also benefits from high passing traffic.
Competition for neighbourhood centre assets intensified during 2014, resulting in investment activity reaching record high levels with around 62 centres transacted for a total of $1.71 billion - up 6 per cent on the previous year. The weight of funds chasing retail assets combined with the low cost of capital has resulted in competitive pricing and significant yield compression for neighbourhood centre assets. Institutions have become more prominent purchasers of neighbourhood centres. While still active, private investors have become net sellers. All types of investors have been targeting the comparatively higher yields on offer from neighbourhood centres.