HMC Capital, the new name for HomeCo, has sold a Masters-converted large format retail investment at Melbourne’s east Knoxfield for $45 million, reflecting a five per cent fully let yield.
The 4.31 hectare property at 1464 Ferntree Gully Road is trading to Troon Property Group, which in 2020 forged a partnership with financier MaxCap to invest in and develop product.
Amart Furniture, Carpet Call and Decathlon occupy parts of the four year old, 13,603 square metre asset.
Their deal comes six months since Troon and MaxCap sold SCA Property Group the modern Delacombe Town Centre, on 6.5ha west of Ballarat, for $112m reflecting a 5.34pc fully let return.
Masters ceased trading at 1464 Ferntree Gully Rd in 2016, after which time the asset was acquired by HMC as part of a portfolio and repurposed into a HomeCo shopping centre.
The property previously traded between HMC divisions for $28m in 2020.
“The sale highlights the strong fundamentals and performance of the large format sector which has seen a resurgence as a result of the pandemic,” Mr Dowers said (story continues below).
“Large format retail assets have witnessed a resurgence in the past 18 months, both from a retailer performance and investment demand perspective,” he added.
“LFR assets benefited from a series of compounding positive attributes including their high degree of convenience/parking and limited enclosed spaces and recent zoning changes, allowing a diverse range of additional convenience ‘daily needs’ and essential services customers,” according to the executive.
“Whilst industrial investment has usurped almost all other commercial sectors, the attributes of the LFR sector, being the closest in configuration and simplicity to industrial, has not gone unnoticed”.
“With prime industrial yields now well below four per cent, the attractiveness of the typical LFR, given its intrinsic land, lower site intensification, building attributes and yield arbitrage have all put the savvy industrial investor on high alert,” Mr Tong said.
“There has been a strong uplift in sales performance in key LFR categories,” he added.
“The inability to travel overseas has seen people put that money into their homes which is why a number of LFR categories are outperforming at the moment,” according to the executive.
“The underlying 4.3ha of industrial zoned land has increased in value significantly over the last few years, which has no doubt made this investment a lot more attractive”.
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