Telstra Super sells Carlingford Court stake for $120 million
Telstra Super has sold its half stake in metropolitan Sydney’s Carlingford Court shopping centre to Hong Kong-based property investor JY Group for $120.5 million.
The sale to JY Group on a passing yield of 6.3 per cent – and a fully leased yield of 6.5 per cent – marks a 36 per cent premium on the price Telstra Super paid in 2013 when it equal-partnered with Federation Centres, since rebranded Vicinity Centres, to buy the centre for $177 million.
The price JY Group paid was a $10 million premium to Vicinity’s book value of its half stake. The deal also offered the chance to undertake a mixed-use apartment development on a vacant 1762sq m site next to the shopping centre, said CBRE agent Simon Rooney, who brokered the off-market deal.
“The result demonstrates the continued demand for quality, metropolitan sub-regional assets with a focus on non-discretionary spending,” said Mr Rooney, CBRE’s head of retail capital markets.
“There is particularly strong interest in assets which offer mixed-use development potential and strategic value-add opportunities.”
JY Group is a co-investor that puts its own money alongside that of high net worth clients into commercial property investments. Co-founder Kai Zhang declined to comment.
Carlingford Court lies 18km north-west of the Sydney CBD. It is a four-level, 33,298-square-metre centre anchored by national retailers Coles, Woolworths and Target, together with mini majors including Bing Lee, Fitness First and The Reject Shop.
The centre itself occupies a 35,510sq m. It draws 5.3 million visitors each year, has 1427 car park spaces and has a moving annual turnover of $188 million.
The weighted average lease expiry of the Coles and Woolworths was 4.7 years. Specialty store tenants have a sales rate of $9515 per square metre, which CBRE said was 8 per cent above the industry benchmark.
The deal is the latest in a string of transactions for Hong Kong-based JY Group, which in October paid Challenger $167 million for a half-stake in one of Australia’s oldest suburban shopping centres, Roselands in Sydney’s south-west, which it now also co-owns with Vicinity.
In the same month last year it also paired with local investor Haben Property Group to acquire Wollongong Central shopping centre from GPT Group in a $402 million deal.
Last year Haben Property Fund and JY Group also acquired Casey Central shopping mall in Melbourne’s south for $225 million.
Rising interest rates and greater economic uncertainty are making some buyers wary about outlaying money on retail assets.
Earlier this month CVS Lane, a family office-style investment platform backed by the wealthy Liberman family and Don O’Rorke’s Consolidated Properties Group, pulled the proposed sale of a $500 million portfolio of malls they jointly own in south-east Queensland.
They took the portfolio to market in July and offers on the assets, either individually or as an entire portfolio, were due to land at the end of August. But the owners pulled the plug two days after a savage sell-off on the ASX led by listed property stocks as US inflation figures stoked expectations of larger rate rises.
