LaSalle moves on Crossroads in $300m retail play
AMP Capital is selling Crossroads Homemaker Centre in Sydney.
US giant LaSalle Investment Management is forging back into the large format retail sector with the purchase of Crossroads Homemaker Centre in Sydney for about $300m.
The deal will be the largest retail transaction of the year after a series of shopping centres went on the block but could not attract buyers at prices where vendors would sell. It also reflects the continuing attraction of large format assets even as large regional malls, which were traditionally most valuable, lose favour.
The US group is buying the asset in Casula in southwest Sydney from property investment house AsheMorgan in a sign the sector remains in stiff demand.
Retail assets have come under pressure as rising rates hit consumer confidence and borrowing costs soar. But homemaker centres are continuing to trade, particularly those with large landholdings and, while the yield on the deal is said to be sharp, the large parcel was a key attraction.
Once complete, the deal will represent a hefty return for AsheMorgan, which held the site for three years after acquiring it for $140m from an AMP-managed fund.
LaSalle manages about $2.6bn of assets in Australia as part of its broader $100bn investment empire. It is an active trader in offices and retail in Australia, with the latest move thought to be backed by a mandate from a US pension fund.
LaSalle has successfully invested in the sector earlier in the property cycle. It sold Home Hubs centres in Sydney’s Castle Hill and Marsden Park to the then Brett Blundy-controlled Aventus Property Group in 2017 in a deal worth about $440m.
The now mature sector came through the coronavirus crisis by producing a more steady performance than landlords exposed to department stores and fashion categories.
The centre has a gross lettable area of 52,138sq m and is positioned on a 143,520sq m site over four separate titles. The LFR hub is fully leased to 38 tenants including national brands Bunnings, Freedom, Officeworks, Fantastic Furniture, Planet Fitness and Nick Scali.
JLL’s retail investments team of Nick Willis and Sam Hatcher and Stonebridge’s Philip Gartland, Carl Molony and Jonathan Fox handled the expressions of interest campaign but declined to comment, as did the parties.
Crossroads sits within the top five LFR assets nationally for total GLA and is backed by a heavyweight tenant mix, with almost all its gross income anchored by national and chain retailers.
The centre was built in 2000 and a food and beverage precinct was added recently. Crossroads could also include logistics, office and accommodation uses in future. The large parcel means parts of Crossroads could be turned to industrial uses.
