Investment powerhouse Alceon and asset manager, CPRAM Investments are looking to divest its iconic regional NSW shopping centre, Orange City Centre, following a recent $24 million redevelopment.
An Alceon syndicate acquired the Orange City Centre in December 2013, when the shopping centre contained a Myer department store on a short lease tail and CPRAM completed an award-winning redevelopment and repositioning of the shopping centre in 2019. Since Myer’s departure, CPRAM has introduced 27 new national and chain tenancies to the centre, which has improved the total non-major moving annual turnover (tenant sales) by 88%, along with contributing to a substantial improvement in the performance of the anchor tenant, Big W.
JLL’s Sam Hatcher and Nick Willis have been exclusively appointed in conjunction with Philip Gartland, Jonathan Fox, and Carl Molony from Stonebridge Property Group to handle the divestment.
JLL’s Sam Hatcher said, “The listing of Orange City Centre comes to market when investment supply of sub-regional shopping centres is scarcely available. This reduced supply heightens investors focus on the few available opportunities in the market, and sub-regionals assets remain highly sought-after due to their flexibility and yield arbitrage to debt costs.”
Situated on a substantial 2.03-ha land holding, Orange City Centre is the central focal point of the Orange retail hierarchy. The asset dominates its vast catchment comprising 148,500 persons and is anchored by a dominant full-line Big W discount department store.
Since Myer’s departure, CPRAM has introduced 27 new national and chain tenancies to the centre
The 14,405m2 sub-regional shopping centre is anchored by a strong performing Big W DDS, and further supported by 52 specialties and 7 kiosks. Orange City Centre has stabilised quickly following the Myer repositioning, with a high occupancy of 99%, despite the pandemic headwinds over the prior years.
JLL’s Nick Willis said, “Syndicators remain the most active capital source for sub-regional acquisitions across Australia, accounting for 48% of acquisitions in 2022 and 52% for 2023 YTD. Despite this, we are fielding increased inquiry from both institutional and offshore capital looking for value in the retail space suggesting that a pricing floor may have been reached and new capital sources will enter the market providing further support for the sub-sector.”
Stonebridge’s Jonathan Fox commented, “The sale presents an exceptional opportunity for an investor to acquire a highly productive retail centre featuring a Big W with strong sales performance. Located in one of the most robust regional economies in NSW, the Central West regions unemployment rate is one of the lowest in NSW and is well below the Australian average, underpinning the strength and resilience of the local economy.”
Stonebridge’s Philip Gartland commented, “Orange City Centre’s thriving regional location and exceptional income growth profile combined with the underlying flexible land zoning and underutilised Gross Floor Area will be highly attractive to a wide range of investors including institutions, syndicates, and private investors. A purchaser has the unique advantage of expanding upon the success of the 2019 redevelopment by further enhancing the value proposition through evolving the tenant mix and capitalising on the CBD landholding.”
Orange is a town which has strengthened over the years to now be the most affluent regional city west of the Blue Mountains (2021 census). The residential housing market has boomed off the back of this affluence, increasing 67% from 2019-22, and the labour market has also shown exceptional resilience with the Central West region recording an unemployment rate of 1.2% vs. 3.7% for Australia.
