The Bamm Group, owners of the Elermore Shopping Centre, have sold their neighbourhood mall in Newcastle to a private syndicate for $18 million, seven years after first buying and then redeveloping the site.
Steven Lerche, who advised on the sale, originally sold the Elermore Shopping Centre to Bamm Group in 2011 for $8.3 million with Ben Nastasi acting on behalf of the purchaser. At the time, the property was anchored by BiLo on a short lease and now boasts a Ritchies SUPA IGA supermarket supported by 17 non-discretionary specialty tenants.
According to Mr Lerche, national director, retail investments at Savills , who sold the asset with colleagues Andrew Palmer and Mr Nastasi, Newcastle is seeing a surge in investment activity, largely stimulated by the $6.55 billion State Government investment mandate which has brought to light the new light rail system on Hunter Street, the new transport interchange at Wickham and construction of the Newcastle City University Campus.
???It was sold on a 6.8 per cent passing net yield.
“We are seeing a lot of investor interest come from the Sydney investment market and interstate markets such as Melbourne and Brisbane due to the significant growth prospects of Newcastle,” Mr Lerche said.
“Retail assets have been in particular favour with developers due to their strategic locations, large site area, existing income stream and potential to re-develop under the existing planning controls.”
Andrew Palmer, associate director, retail investments at Savills, with the median house price in Newcastle at $595,000 compared to about $1.17million in Sydney (according to Domain Group’s rental and house price report), “investors are taking notice”.
“Elermore Vale and its surrounding suburbs are certainly set to reap the benefits of this surge in investor demand,” Mr Palmer said.