Investment Feature Stories Industry News

Benowa Gardens sells for $60.5 million

Savills’ Peter Tyson transacted the deal on behalf of Brisbane-based fund manager, IJ Capital

Continuing a strong run of retail transactions in Queensland, the Benowa Gardens shopping centre, located on the Gold Coast, has sold for $60.5 million, reflecting a passing yield of 4.99%.

Benowa Gardens is a Coles anchored enclosed neighbourhood mall, with 37 specialty tenancies and a freestanding KFC drive-through restaurant. The centre features a total GFA of 5,856m2 and parking for 384 cars, on a site of 17,660m2. Benowa is an established residential suburb of the Gold Coast, located four kilometres west of Surfers Paradise.

Savills’ Peter Tyson transacted the deal on behalf of Brisbane-based fund manager, IJ Capital, to a local private investment group after less than two years of ownership, crystalising a strong uplift in value.

IJ Capital acquired the centre in early 2020 for $40.1 million in a transaction also managed by Savills.

Led by Scott Lai, IJ Capital targets investment into assets with strong return metrics above market levels or clear value-add opportunities. Lai commented: “IJ Capital’s focus is identifying market-beating returns for our investors, including significant capital growth”.

“We recognised value-add opportunities with Benowa Gardens, consistent with the ‘core-plus’ investment objectives of the Fund. We immediately undertook an active management strategy including centre upgrade works and a focused leasing plan successfully addressing numerous vacancies.”

Tyson added “After stabilising the centre and significantly improving the income stream, the centre was briefly marketed in December 2021 and attracted multiple offers, resulting in a deal reflecting a capital uplift of over 50% in less than two years.”

“Convenience based neighbourhood centres as an asset class remain incredibly popular in the market, attracting a wide range of capital sources. Income streams underwritten by staple everyday needs, predominately food and services, have proven resilience and are less prone to fluctuation from outside influences. The pandemic effects, social distancing restrictions and work from home, have bolstered performance in the smaller malls,” said Tyson.

“This underlying performance continues to drive an enormous weight of domestic and off-shore capital, both private and institutional, to target the asset class. Transactions on smaller malls tend to be dominated by the nimble private investor fraternity and is likely to remain the case as yields continue to compress in response to the weight of capital.”

About the author

Shopping Centre News

Shopping Centre News (SCN) is in the ‘information business’, and is perceived as such by its readers. Daily industry news makes a must-visit as part of the morning routine for those who want to keep right across the latest retail developments and events, while SCN's premium magazine is the leading publication for the shopping centre industry in Australia and New Zealand.

Known as the ‘industry bible’ SCN is printed five times a year with fascinating, in-depth features and important critical analysis written by known industry insiders as well as the popular ‘Guns’ reports, which ranks Australian shopping centre performances. Shopping Centre News is the only publication in the world that features centre statistics on Turnover, Turnover per square metre and Specialty Shop turnover per square metre for every major centre in Australia.

Add Comment

Click here to post a comment

Notice: Undefined index: comment_cookie_gdpr in /opt/amaze/srv/live/app/www/wp-content/themes/herald/core/template-functions.php on line 28

Notice: Trying to access array offset on value of type null in /opt/amaze/srv/live/app/www/wp-content/themes/herald/core/template-functions.php on line 28