Competition drives strong result at Broadway Plaza

The Broadway Plaza in Punchbowl sells for $41.2 mill.

PPB Advisory has sold The Broadway Plaza in Punchbowl to Real Asset Management Group (RAM) for $41.2 million at circa $4,873/sqm.

The Broadway Plaza, completed in 2013, is anchored by a full-line Woolworths supermarket and BWS on a 20 year lease to 2033 (plus options) and is supported by 3 mini-majors, 27 specialty shops, 2 ATMs and 1 vending machine over a total GLA of 8,455sqm. The Broadway Plaza forms part of a mixed use development in a densely populated area with limited provision of supermarkets, just 17 km from the Sydney CBD.

Will Gray, Head of Real Estate at RAM noted that the acquisition was in line with the company’s retail strategy along Australia’s eastern seaboard.

“We are delighted to have secured a recently developed shopping centre in the tightly held Sydney metropolitan area for our investors on attractive terms. The fundamentals for the centre looking forward are exciting and challenging, and we will certainly need an active and concentrated approach to execute on our strategic long term plan to deliver maximum value to our investors.”

Colliers International’s James Wilson, Director of NSW Retail Investment Services, and Matthew Meynell, Head of Investment Services, brokered the deal in conjunction with Philip Gartland and Lincoln Blackledge from Stonebridge Property Group.

“This benchmark result highlights the huge appetite for NSW neighbourhood shopping centres,” said James Wilson. “The campaign demonstrates the ability of prudent retail investors to constantly review their hurdle rates, in line with the evolving market conditions, in order to deliver on their investment strategy.”

“The unprecedented interest from established and emerging investors, and subsequent result, reflects the lack of quality investment opportunities in metropolitan Sydney,” said Matthew Meynell.

The Broadway Plaza’s flexible specialty lease profile offers a rare opportunity to reposition the asset by enhancing the tenancy mix to maximise returns.

“Of particular note is the ongoing acceptance of retail stratum centres by an increasingly diverse range of purchaser groups, particularly in tightly held inner metropolitan locations. Stratum retail was a tougher sell in the past, but with the improvement in mixed use development design and retail / residential compatibility, coupled with the increasing density and hence value of land, well anchored stratum titled retail centres have shown yields more akin to traditional freehold sites in recent years as more and more buyers accept its longevity and evolvement as an asset class” said Philip Gartland.

The sale was conducted by an Expressions of Interest campaign.

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