Renowned developers and shopping centre owners Revelop have acquired a key sub-regional shopping centre development site which is set to be the first new sub-regional development in Sydney in more than 20 years.
Salta Properties exits its shopping centre development site at Jersey Road, Plumpton in an off-market transaction for $20 million, which had a total project value over $200 million.
Salta Properties acquired the land which adjoins Lendlease managed Plumpton Marketplace back in 2005. Over this period, the vendor gained development approval for a substantial 17,686m2 sub-regional shopping centre development in 2018 through the Land & Environment Court.
The sale was exclusively handled by JLL’s Retail Investments Australia’s Nick Willis and Sam Hatcher in a direct off-market deal.
Willis said: “Core landholdings in Sydney metropolitan locations for shopping centre developments are extremely rare. The majority of these sites are acquired by the operators, Woolworths and Coles, due to fierce competition for key trading locations.”
The 36,900m2 site, which is located approximately 36km from the Sydney CBD and is well connected to the M7 and M4 Motorways. The proposed development, known as Plumpton Gardens, will deliver a state-of-the-art brand new sub-regional shopping centre that will cater for the burgeoning growth in the western Sydney market.
The 36,900m2 site adjoins Lendlease managed Plumpton Marketplace
Anthony El-Hazouri, founder of Revelop said: “The acquisition of Plumpton Gardens development site is in line with our growth strategy for the business. We continue to acquire shopping centres and development sites in key locations which will deliver strong total returns and are supported by long term macro trends of strong population growth, improving gentrification, and limited new retail floor space supply.
“A brand new sub-regional shopping centre has not been built in Sydney for over 20 years. In this time the retail landscape has vastly changed and evolved. This opportunity provides us with a clean slate to deliver what will be a state of the art in the sub-regional sector and meet the demands of today’s customer,” he said.
Charbel Hazouri, founder of Revelop said: “The site has been held in the Salta family for almost 20 years, we look forward to taking a proactive approach to the development and delivering a best-in-class centre that will service the growing demand from the local community. We have a connection to western Sydney and are attracted to the strong growth fundamentals that it provides for retail. This acquisition adds to our portfolio in the region including Stanhope Gardens and Emerton Village.
“There is very strong tenant demand in the area given there has been very limited development – our new centre will deliver the best-in-class retail and provide the residents a premium offering to which has not been available to them in the past. We have some big announcements to make in the coming weeks and our intention is to commence development as a priority,” said Hazzouri.
The acquisition of the Plumpton Gardens development site is in line with Revelop’s growth strategy
Willis commented on the underlying supply and demand imbalance that is occurring in the sector; “Approximately 1.13m2 of retail space has been created per additional person in Australia based on the population growth profile. The Australia population is forecast to grow by 1.5% p.a. over the next five years, or by 2.1 million people,” he said.
“Using the 1.13m2 historic ratio as a scenario, Australia will require between 2.06 and 2.58 million square metres of retail floor space to match the population growth over the next five years. However, there is currently only 285,700m2 in the supply pipeline under construction, which equates to just 0.14m2 per additional person.
“Per capital supply is likely to be lower in the future than in the past, partly because of higher ecommerce market share. However, ecommerce still only accounts for less than 13% of total retail spending. The undersupply of retail floor space and strong population growth will be a major driver of sales productivity and therefore income growth.
“This is driving the continued strong performance for the sector where we have now two consecutive reporting seasons for positive leasing spreads across all the major retail REITs and vacancy in Australia fast approach historic low levels, following that of the American market which is now experiencing the lowest level of vacancy in history,” said Willis.
Sam Hatcher said: “When markets are turbulent, it often provides opportunities to gain access to assets which rarely exchange hands. The retail sector is experiencing a resurgence in demand as capital looks for more stabilised pricing (vs. traditional office and industrial), supportive demographic tailwinds, and an ability to diversify income streams through redevelopment into alternative uses.”
