Homemakers make hay as bigger mall sales stall
Homemaker Prospect has been sold to AsheMorgan.
Sales of the country’s top shopping malls are in the doldrums but large format centres directed at meeting household needs are firing.
Property giant Dexus has sold a holding in the western Sydney suburb of Prospect for $78.9m.
The listed group completed the sale of the Homemaker Prospect, and the appetite for the asset shows it is well positioned to benefit from resilient consumer spending even in the face of rising interest rates.
It was picked up by real estate house AsheMorgan, which has built a track record in the once-overlooked sector.
While the threat of an economic slowdown crimping discretionary spending looms over the malls housing fashion chains and department stores, large-format centres have proven to be more stable.
Dexus is focusing on its core office and industrial operations, as well completing its purchase of the Collimate Capital platform from AMP. the sale is a premium to the $64.2m which Dexus paid for the centre in 2019 when it had ambitions to convert it into an industrial property.
AsheMorgan is experienced in the sector and sold Sydney’s Crossroads Homemaker Centre in October to LaSalle Investment Management for $282m.
The price on that deal was just over double the $140m it paid three-and-a-half years previously for the 52,000sq m homemaker hub.
Its latest acquisition of the centre near Blacktown puts it in one of the fastest growing catchments in the country. The 26,000sq m centre has 28 showrooms occupied by brands including Fantastic Furniture, The Good Guys, Snooze, Beacon Lighting and Bing Lee.
The sale was brokered by JLL’s Nick Willis and Sam Hatcher.
Mr Willis said that of the five largest retail transactions completed in Australia in 2022, three have been large-format retail assets. These included the Crossroads Homemaker deal and Homeworld Helensvale on the Gold Coast, which sold for $265m.
The Alexandria Homemaker in inner-city Sydney was sold for just over $200m to industrial group Goodman, which plans to convert it for last-mile deliveries.
“The sale of Prospect Homemaker takes the total large-format retail sales volume for 2022 to a five-year high and reflects the intensified demand for these assets as a result of the category’s resilience over the past two years,” he said.
The agent said there has been more than $750m worth of large-format retail assets trade in 2022 and “through this we have seen a structural shift in the investor base attracted to both the sector’s investment fundamentals but also considering their alternative-use potential”.
Mr Hatcher said the sub-sector performed exceptionally well, recording the most significant yield compression across all retail sub-sectors in 2020 and 2021, with yields tightening by 105 basis points between the end of 2019 and the final quarter of 2021.
JLL research shows that pandemic-induced lock downs and travel bans were a significant tailwind as household goods spending remains elevated at 31 per cent above pre-pandemic levels. The firm put the jump spending down to strong renovation activity and a sharp increase in demand for home office furniture and equipment with consumers spending.
