MA Financial Group Limited and Keppel REIT have entered into an agreement to jointly acquire the Top Ryde City Shopping Centre for a gross acquisition price of $525 million.
The property is a major retail destination located 14km north-west of Sydney’s CBD and serves as the main feature of a mixed-use commercial precinct and transport hub with over 12 million yearly visitors.
The net acquisition price reflects a fully leased yield of around 7.2 per cent and equates to a 45 per cent discount to the estimated replacement cost of the asset. With 96 per cent occupancy, the centre continues to achieve record trading performance driven by a strong proportion of tenants in non-discretionary retail.
“Opportunities to acquire 100 per cent interest in a regional shopping centre of this calibre in Australia are exceptionally rare. Over the past 15-years, only two other 100 per cent interest in regional sized shopping centres have ever sold in NSW,” said Sam Hatcher, Head of Retail Investments, Australia & New Zealand at JLL.
“Major institutional capital is increasingly looking to re-weight back towards the retail sector in Australia, driven by the strong fundamentals and consistent performance of the sector globally.”
Keppel REIT, an SGX-listed real estate investment trust, will contribute a 75 per cent co-investment, while an MA-managed fund will acquire the remainder.
The Fund aims to deliver a distribution yield of 8 per cent and a total return of 13 per cent per annum over five years.
MA Financial will oversee the full range of management functions at the centre, such as strategic asset management, leasing, and development management.
“We are excited to partner with Keppel REIT to acquire Top Ryde City Shopping Centre on very attractive terms on behalf of our valued stable of investors. The social infrastructure characteristics of the shopping centre provides a defensive foundation for investor returns at a point of time that we believe the tailwinds for the real estate cycle are very favourable,” said Chris Lock, Head of Core Real Estate at MA Financial.
“We are glad to have MA Financial as our partner in investing in Top Ryde City Shopping Centre. We are pleased to appoint MA Financial as manager of Top Ryde City Shopping Centre,” said Chua Hsien Yang, CEO of Keppel REIT Management Limited.
“This investment marks Keppel REIT’s strategic expansion into the retail sector, which continues to offer attractive yields and strong growth potential. Underpinned by sustained consumption growth and a rising population, we are confident that this investment will enhance Keppel REIT’s long-term portfolio resilience and overall returns.”
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