Rockdale Plaza, a dominant and strong-performing convenience based major Sydney sub-regional shopping centre, has sold for $142 million to Charter Hall Retail REIT (CQR) on a capitalisation rate of 6.25%. In line with Charter Hall’s strategy the purchase presented an exceptional opportunity to acquire a centre in the highly populated suburb of Rockdale in Sydney.
Charter Hall’s Retail CEO, Greg Chubb said, “The acquisition of Rockdale Plaza offers the REIT an exceptional opportunity to acquire a high performing, convenience-based centre. Underpinned by supermarkets and non-discretionary food and service-based uses, the Acquisition aligns with the REIT’s investment strategy and enhances portfolio metrics to ensure we continue to deliver long-term sustainable growth in earnings for investors”.
Rockdale Plaza is located in a densely populated Sydney metropolitan location in the suburb of Rockdale, which is a rapidly growing suburb undergoing significant regeneration and urbanisation, just 12km south of the Sydney CBD. The centre occupies a landmark, high-profile site of approximately 47,800m2 with excellent exposure to a high level of passing traffic on the Princes Highway.
Rockdale Plaza, located 12kms from Sydney’s CBD
The centre has a total GLA of approximately 21,331m2, high occupancy of 99.8% and is anchored by a strong performing Woolworths and ALDI supermarkets, a Big W together with seven mini-majors and 46 specialties plus convenient parking for 907 vehicles, driving 4.5 million annual customer visitation (+3.0% year on year). JLL’s Head of Retail Investment for Australasia Simon Rooney has exclusively negotiated the agreement for the sale of a 100% interest in the centre.
Rooney said, “While the focus for some institutions has been on disposals, this transaction demonstrates that AREITs will continue to target and selectively acquire quality retail assets as they reweight their portfolios towards higher-growth metropolitan locations.
“Sub-regional shopping centres in the Sydney metropolitan area are tightly held with typically only one opportunity being made available per year. Metropolitan-located retail assets are highly sought after given their exposure to strong population growth and rising urban density, particularly in Sydney and Melbourne.
Anchored by a high performing Woolworths
“Investors see value in the retail sector given the recent shift in asset pricing and attractive yields. While the focus for some institutions has been on other asset classes, a number of groups are making tactical retail acquisitions and we expect more investors to consider the relative value of retail throughout the remainder of 2019. Transaction activity reached the third highest level on record in 2018, with 123 deals totalling $8.1 billion,” said Rooney.
Rockdale Plaza has impressive MAT of $180.8 million (+5.0% year on year) which would place it in the top 60 Little Guns in the country based on MAT. The centre is underpinned by strong speciality productivity, of $11,703 per sqm (+4.9% year on year). Rockdale Plaza’s outperformance is underpinned by a substantial worker population and a vast MTA of 130,040 residents, growing at a robust 1.9% p.a. over the next decade.
