MA Financial has acquired a Sydney megamall from Blackstone in a blockbuster deal worth $525 million.
Top Ryde City Shopping Centre, 14km north-west of the Sydney CBD, is a major retail hub for the area with 77,488sq m of lettable area on a 34,240sq m footprint. An apartment complex of 653 units sits above the mall.
Anchor tenants include supermarket majors Coles, Woolworths and Aldi, as well as Kmart, Big W, 23 mini-majors and 152 specialty stores. Other tenants include an eight-screen Event Cinemas, childcare, fitness and medical facilities, and a swim school.
Moving annual turnover is estimated at $486.9 million and supermarket sales at $200.9 million.
The original complex on the site struggled after competitor megamalls opened in the 2000s. A demolition and rebuild was completed in 2010.
Sydney metro regional malls rarely sell with 100 per cent interest, while Top Ryde City has gone through several pairs of hands since reopening. The most recent transaction was the 2012 Blackstone purchase of Top Ryde City for $341 million from receivers McGrathNicol, who had taken possession from John Beville.
Currently 96 per cent leased, MA Financial said that the net acquisition price implied a fully-leased yield of about 7.2 per cent and was a 45 per cent discount to replacement cost.
The alternative asset manager currently holds a $12.7-billion portfolio on behalf of clients and $155 billion in managed loans.
Head of core real estate Chris Lock said that the deal was struck “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.”
Financial backing from Keppel REIT, a Singapore-listed fund, provided a 75 per cent co-investment.
Keppel chief executive Chua Hsien Yang said that the acquisition “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.”
MA Financial will take over all functions at Top Ryde through its recently acquired management arm, IP Generation. That includes strategic asset management, property management, leasing and development management.
IPG holds 14 shopping centres representing about $2 billion value on behalf of high-net-wealth investors.
JLL and Colliers ran an expressions-of-interest campaign for the asset that closed in June.
