A strong performing neighbourhood centre in regional NSW has transacted off market for $18.3 million, showcasing the robust demand for neighbourhood centres after a flurry of deals in 2024.
Northgate Tamworth is a thriving regional neighbourhood centre anchored by a high-performing Coles supermarket, paying percentage rent and supported by 13 specialty tenants and one kiosk.
Sold by Sebastian Fahey, Sam Hatcher and David Mahood, from the JLL Retail Investments NSW team, the asset was acquired off-market by WA-based syndicator Westbridge Funds Management on behalf of Region Group at book value.
Sebastian Fahey, Executive at JLL Retail Investments, NSW commented, “The sale of Northgate Tamworth is Westbridge’s maiden investment in NSW, marking a key milestone in the expansion of their convenience retail portfolio. This demonstrates the continued trend of new entrant capital into the shopping centre market with 50% of NSW neighbourhood centre sales by JLL in 2024 selling to maiden capital.”
The acquisition of the Northgate Tamworth takes Westbridge’s total assets under management to over $960 million, with a portfolio spanning Western Australia, South Australia, Victoria, Queensland and now New South Wales.
Simon Worth, Head of Capital Transactions at Westbridge Funds Management said, “We saw the centre as an attractive income opportunity for our investors, underpinned by the strong anchor tenant in Coles and additional prospects for income growth.
“In addition to these strong income prospects and purchasing well below replacement cost, we see the opportunity to add value to the centre which, together with strong fundamentals for the neighbourhood retail sector offers potential for future capital uplift.”
The off-market sale of Northgate Tamworth isn’t the only recent deal by JLL with a circa $50 million sale of Rutherford Marketplace on behalf of Charter Hall.
Since the beginning of 2024, JLL have successfully transacted more than $260 million worth of neighbourhood centres, making Northgate Tamworth the sixth neighbourhood centre sold in NSW by the JLL team.
Fahey added, “NSW has seen an increase in neighbourhood centre activity for 2024 year-to-date with a 53% increase compared to 2023. The consistent appeal of convenience-based neighbourhood centres is attracting significant new-entrant capital, driven by stable income streams, large land holdings and long-term capital growth potential, compared to other sectors.”
This demand is further heightened by rising construction and debt costs, creating an all-time low forecast for available floor space.
Mahood added, “With limited development supply, established neighbourhood centres will benefit from Australia’s growing population and sustained non-discretionary spending, despite cost-of-living pressures. This will lead to increased performance of existing centres, underpinning sales, income growth and capital appreciation.”
