Private investors snap up Sydney shopping centre as retail sites find favour

Anthony Mellowes, CEO SCA Property Group, is selling off properties, partly to fund a stock buyback. Picture: Britta Campion

The listed Region Group has sold Greystanes Shopping Centre in Sydney to private retail investment group Revelop in a $76m deal, as retail property finds favour with private investors.

The shopping centre landlord has capitalised on the rising demand for neighbourhood shopping assets with the sale, which will help fund its plans to undertake an on-market buyback for up to $100m of stock.

The sale marks out Region as a first mover in 2025, as the pricing of neighbourhood shopping centres is rebounding. Region acquired Greystanes Shopping Centre in 2014 for $38.2m.

The sale to the increasingly active Revelop group was struck on a yield of 5.5 per cent and a sale rate of $12,639 per square metre, which was the tightest capitalisation rate paid for a neighbourhood shopping centre above $50m in the past three years.

CBRE agent James Douglas negotiated the sale. He said more deals were in train.

“We are increasingly seeing vendor and purchaser price alignment on transactions. In this instance, the strong pricing and total return outcome for Region Group was matched by Revelop’s desire to acquire an asset in metropolitan Sydney and in an area where they held other retail investments,” Mr Douglas said.

Revelop director Charbel Hazzouri said the company was growing its Sydney metropolitan portfolio with the purchase of Greystanes Shopping Centre.

He said that in the national sale campaigns the firm was co-ordinating, “we are seeing increased activity and investor engagement in sale processes”.

“We expect transaction volumes and pricing to reflect this market shift through the balance of the year,” he said.

Revelop director Charbel Hazzouri said the company was growing its Sydney metropolitan portfolio.

“The acquisition not only strengthens our presence in western Sydney but also creates powerful synergies with our existing centres in surrounding areas including Pemulwuy, Smithfield, Blacktown and Stanhope. We see strong future potential in this asset and are proud to continue investing in high-quality, community-focused retail centres,” he said.

Revelop has been active this year, swooping on Lake Macquarie Square at Mount Hutton, near Newcastle, in a $122.5m deal as it also expands in regional NSW. It picked up the centre from the listed Charter Hall Retail REIT at a small premium on book value.

It earlier bought Kirrawee Shopping Centre in Sutherland Shire, which was sold by supermarket giant Woolworths for $39.75m, and acquired East Quarter Village in Hurstville in another direct deal for about $30m.

Revelop has also been looking to develop new shopping centres and snapped up a site for a $200m-plus shopping centre on Sydney’s outskirts from Melbourne’s Tarascio family.

Built in 2014, the Woolworths-anchored Greystanes Shopping Centre is 29km west of the Sydney CBD. It has 30 shops, parking for 271 vehicles and serves a trade area of about 90,000 people.

The centre was sold above Region’s December book value.

CEO Anthony Mellowes said the company was focused on maximising security holder returns. He said a buyback at current trading levels was an “attractive and prudent” use of capital. The deal is expected to be accretive to adjusted funds from operations.