HMC Capital has sold a HomeCo complex in Melbourne’s east ahead of settling on a pricier retail investment, north west of Sydney.
The Victorian property, HomeCo Box Hill, fetched $67.5 million – book value – from an as yet undisclosed offshore buyer.
It is the second large format retail asset shed from the HomeCo Daily Needs REIT this financial year; the other, in Perth’s Midland, collected $74.8m from Banjo Bond, the son of late businessman Alan, in a deal settling two months ago.
The Box Hill property is set to settle next quarter – delivering the fund a c13.5 per cent exit internal rate of return.
The manager slotted the mall with six other assets into the trust in April, 2021 – a portfolio deal worth $266.4m.
Also today we are reporting Chris Lock’s IP Generation sold Torquay Village to Malaysian investors for $50m – a $10m rise on the price he paid two and a half years ago.
HomeCo Box Hill
On a 3.6 hectare Industrial 1 zoned block at 249 Middleborough Road, HomeCo Box Hill contains 13,903 sqm with 13 tenancies; BCF, Chemist Warehouse and Petbarn are amongst the occupiers contributing to a weighted average lease expiry by income of six years (story continues below).
The sale price reflects a c5.5pc yield.
Proceeds will be tipped into the $78.4m purchase of a mall in Sydney’s Kellyville, also set to settle next quarter, on a 5.4pc initial return.
“HomeCo Box Hill represents a strong performing LFR asset which is underpinned by an exceptional land holding in a prime location – such attributes are what many of the most aggressive capital sources are looking for in the…market,” JLL’s Stuart Taylor, who brokered the off market deal with Tom Noonan, said.
“In the current higher interest rate environment, investors are seeking either high yielding assets or properties which have the alternative levers to drive capital appreciation such as reversionary upside in land value,” he added, alluding to potential residential development prospects.
“While transaction volumes remain subdued in the retail sector, there is significant demand from well capitalised private investors,” according to the executive.
“These buyers are seeing this time in the cycle as an opportunity to secure prime assets which rarely become available for purchase from long-term holders”.
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