JY Group empire to top $3bn with Bankstown Central stake in its sights
A new owner is circling a stake in Bankstown Central as shopping centre trading picks up. October.
Asian-baked property player JY Group is fast establishing itself as a mainstay of the retail sector, and is in the box seat to pick up a half stake in Bankstown Central in Sydney’s western suburbs for more than $300m.
The transaction is being struck below the 6 per cent mark, showing its status as a major Sydney metropolitan mall with strong growth potential, and affirming values across the sector.
The asset was put on the block by Middle Eastern investor Abu Dhabi Investment Council and Challenger Life, which are advised by Elanor Investors Group. The interest in the centre is being offered via Simon Rooney of CBRE but the agent and the parties declined to comment.
The sale stands apart from Elanor’s disposals of hotels and smaller shopping centres due to its scale and the contest for the asset, which also drew the likes of AsheMorgan.
JY Group has established itself as a major partner of Vicinity Centres, which co-owns and manages the asset. The company has been buying when the cycle is recovering, and is likely to benefit from interest rate cuts that will stimulate consumer spending and boost investment values.
It has built up substantial shopping centre holdings over the last six years and the buy would take its holdings to more than $3bn.
In 2019, it acquired the Melbourne Brimbank Shopping Centre alongside Mulpha Australia. Two years later it worked with Haben to acquire The Pines Shopping Centre in Doncaster East in Melbourne, and then teaming up to buy Melbourne’s Casey Shopping Centre and then Wollongong Central Shopping Centre.
In 2022, JY Group turned its attention to Sydney and acquired a 50 per cent interest in Roselands Shopping Centre for $167m, where Vicinity was co-owner. That year, it also bought a 50 per cent interest in Carlingford Court, where Vicinity was also co-owner. JY Group now co-owns those two complexes with HMC Capital’s Last Mile Logistics Fund after Vicinity sold out.
JY Group has kept buying and last year acquired a 50 per cent interest in Warriewood Square for $135.5m, again placing it beside Vicinity. But it has also bought malls like Roxburgh Village outright and it picked up GIC’s stake in Westfield Whitford City, where Scentre is co-owner.
Bankstown Central is likely to be overhauled into a mixed town centre. Vicinity has proposed an ambitious multistage scheme to transform the area.
It held the whole centre at $541m at the end of last year but plans for 1300 apartments on the site were fast-tracked this year, potentially boosting its value.
The complex is a three-level regional shopping centre anchored by Myer, Big W, Kmart, Coles and Woolworths. It has more than 190 specialty stores and houses a Grand Market fresh food precinct, a Foot Locker store, Uniqlo, JB Hi-Fi and Services Australia.
The asset’s position in the Bankstown CBD, which is part of the Sydenham to Bankstown Urban Renewal Corridor, was a drawcard. Vicinity five years ago unveiled plans to transform Bankstown Central into a vibrant mixed-use urban neighbourhood.
The entire 11.4ha site would be a mix of offices, a hotel, serviced apartments, student accommodation, apartments and childcare facilities. An initial stage, including Bankstown Exchange – to feature 30,000sq m of A-grade office space across three buildings and ground-floor retail incorporating a dining-focused Eat Street – was approved in 2021. The full vision would see 300,000sq m of new buildings being added to Bankstown Central’s existing footprint across 16 development sites.
The ADIC and Challenger Life Co bought their stake in the mall as part of a deal in 2013 when they bought both the Bankstown interest and a half stake in a Roselands complex from Vicinity forerunner Federation Centres.
