Fortius picks up Cammeray Square from Stockland for $39.05 million

Stockland has sold the Cammeray Square shopping centre on Sydney’s exclusive lower north shore for $39.05 million.

Private Sydney-based investment house Fortius Funds Management – which last week spent $174 million on three inner-city Sydney retail assets – is the buyer.

Cammeray Square forms part of a mixed-use development of four buildings, surrounding a central plaza.

Fortius Funds Management is picking up Cammeray Square on a 7 per cent passing yield.

Spread over a 6815 square metre site at 450 Miller Street, the 4756 sqm complex includes ground floor retail with 15 shops and restaurants and an outlet tenanted to Harris Farm Markets.

Five commercial tenancies, including one occupied by a childcare operator, rent the upper levels, while a basement contains 80 car parks.

Cammeray Square has a Weighted Average Lease Expiry (WALE), by area, of 5.8 years.

Cushman & Wakefield’s national head of retail investments, Nick Potter, and senior executive, Billy Dent, represented Stockland, which is amid a shopping centre divestment program.

The mixed-use complex (circled) is one of four buildings surrounding a central courtyard in Sydney’s exclusive Lower North Shore.

The Sydney-based fund manager and developer is offloading the investment on a 7 per cent passing yield.

Neighbourhood centres were the most traded of all retail assets during this year’s third quarter, according to a recent Cushman & Wakefield Retail Investments report, which said 14 deals were struck worth a total of $565 million, and with the average initial yield being 6.58 per cent.

Elsewhere in New South Wales, the agency has sold neighbourhood shopping centres within mixed-use or potential mixed-use sites including Liverpool, Plaza, which Abacus Property Group sold to a private investor, and the off-the-plan Coles Crows Nest stratum – which fetched $43 million.

Cammeray Square contains 80 basement car parks.

Fortius targeting inner-urban locations

Earlier this month, Fortius and SC Capital paid Frasers Property Australia and Sekisui House $174 million for three assets in Sydney’s $2 billion Central Park development.

Central Park Mall, DUO Retail and Park Lane Retail, all developed in 2013, offer a total of 14,600 square metres of gross floor area.

Fortius co-purchased the investment on a 5.5 per cent net yield, following a deal struck by Colliers International’s Lachlan MacGillivray.

Fortius Funds Management chief executive officer, Sam Sproats, said the acquisition of Cammeray Square “is consistent with the firm’s investment strategy of acquiring well-located inner-urban retail and mixed-use assets underpinned by diverse income streams that are supported by strong and growing catchments”.

It plans to reposition Cammeray Square – Mr Sproats saying the centre needs a different ambience to improve the customer experience.

“Accessibility initiatives that strengthens the tenancy mix and enhances the offering to the local community and broader retail market,” will also form part of Fortius’ plan.

Mr Potter said neighbourhood shopping centres like Cammeray Square within a populous inner-city location, and a strong weighting towards defensive, convenience and serviced based occupiers, are still experiencing strong demand despite a softer retail environment.

“We continue to see the trend towards neighbourhood centres integrating with strata mixed-use developments.

“This has helped underpin strong investor interest in these centres in New South Wales and across the east coast, and liquidity is expected to continue.”

Three weeks ago, Fortius Funds Management and SC Capital paid Frasers Property Australia and Sekisui House $174.5 million for three retail assets within Sydney’s $2 billion Central Park development – including the Central Park Mall.

Stockland’s retail sale

The sale of Cammeray Square is part of a shopping centre divestment program for Stockland.

Announced it August, it came as the investor devalued its retail portfolio to the tune of $474 million citing softening growth, rental income changes and estimated capital gain costs.

It recorded a loss selling Cammeray Square, for which it paid Hamptons Development Group about $42 million in 2007.

Three months ago we reported Stockland offloaded the Tooronga Village shopping centre in Melbourne’s East Hawthorn to Newmark Capital for about $63 million.

Stockland sold Tooronga Village to Newmark Capital in July.

Last April, it sold investor Laura Wong the Highlands neighbourhood shopping centre, in Melbourne’s northern suburb of Craigieburn, for $43 million.

In the same month, it offloaded the Wallsend retail town centre in Newcastle, in regional New South Wales, for $81 million.

Stockland has also purchased non-retail investments recently: in August we reported it acquired residential development sites in Altona North, next door to another it paid $48 million for, in 2017.

Also two months ago Stockland snapped up a 242 hetare site in Merrifields North, near where it is building the Cloverton housing estate, on Kalkallo’s former Lockerbie sheep station – a 1121 hectare farm it acquired from two lucky sisters in 2010 for $300 million.

Stockland paid two lucky sisters a total of $300 million for the 1121 hectare former Lockerbie grazing station in Kalkallo (shaded) in 2010. Now branded Cloverton, it is Melbourne’s largest master-planned community with more than 11,000 dwellings, and a town centre, planned.

Cloverton, Melbourne’s largest master-planned community, will replace the farm Ernest Henry Leonard Burgess acquired for $920,000 in 1979.

In May, we reported Stockland sold a residential development site on Queensland’s Sunshine Coast,

This site, the last significant oceanfront development site on Bokarina Beach, wasn’t for public sale, but traded off-market when Stockland asked Colliers International’s Baydn Dodds to test the market.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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