Hong Kong’s JY Group Buys Half-Stake in Northern Sydney Mall for $91M

JY Group has acquired its second half-stake in an Australia mall in less than two months, with the Hong Kong investor picking up a 50 percent interest in a northern Sydney shopping centre for A$135.5 million ($91.3 million).

JY purchased its stake in Warriewood Square from real estate fund manager IPST, according to a LinkedIn post by deal broker Simon Rooney, head of retail capital markets for the Pacific region at CBRE. ASX-listed Vicinity Centres continues to hold the remaining 50 percent and also manages the property.

Located 29 kilometres (18 miles) northeast of central Sydney, Warriewood Square spans 30,301 square metres (326,157 square feet) of gross leasable area and features Coles, Woolworths, Aldi and Kmart as anchor stores, representing 54 percent of GLA.

“This transaction completes A$1.3 billion in 50 percent interests in retail assets changing hands since June 2024,” Rooney said, including JY’s September buy of a 50 percent interest in Perth’s Westfield Whitford City from Singapore sovereign fund GIC for A$195 million.

Private Capital in Pursuit

Warriewood Square’s on-market sale process attracted considerable interest from private capital, according to Rooney, with suitors attracted to the location, capital investment works completed in 2016 at a cost of A$85 million and the performance of the supermarket operators, which contribute combined annual sales in excess of A$100 million.

The mid-sized mall was built in 1980, redeveloped in the late 1990s and revitalised eight years ago with the addition of Aldi, more than 30 new specialty stores, an expanded and upgraded Woolworths and a modern Kmart, IPST said in a fact sheet.

Little is publicly known about JY Group, led by founder and CEO Kai Zhang, a former PwC partner in Sydney. The Hong Kong outfit invests in Australian commercial properties and two years ago acquired a half-stake in the Carlingford Court mall in suburban Sydney for A$120.5 million. The rest of its portfolio includes three shopping centres in the Sydney area, five Melbourne malls and a resort hotel in Cairns.

JY co-invests alongside high-net-worth clients, according to the Australian Financial Review. The firm had not responded to Mingtiandi’s request for comment by the time of publication.

The Warriewood Square deal, which values the asset at A$271 million, transacted at A$8,944 ($6,027) per square metre of GLA.

Solid Demand Fundamentals

Australia’s retail investment market saw 28 transactions totalling A$850 million during the second quarter of 2024, according to a CBRE update.

Referred to as sub-regional centres in local industry-speak, mid-sized malls remained the most popular asset class for investors, with A$1.3 billion of the assets changing hands in the first six months of the year, the consultancy said. Notable sub-regional deals in the second quarter included Sydney’s Ashfield Mall, which sold for A$169 million, and Perth’s Maddington Central, which changed hands for A$107 million.

“Sub-regional and neighbourhood centres have a high level of liquidity and solid demand fundamentals and as a result, we expect solid volumes of trade for the remainder of 2024,” CBRE said.