SC Capital Partners has teamed up with Australia-based Fortius Funds Management to buy three shopping centres in Sydney for A$174.5 million ($118 million) from a joint venture between Frasers Property Australia and Sekisui House.
The Singapore-based private equity firm, which has over $7 billion in assets under management across five discretionary closed-end opportunistic funds, is jointly acquiring the assets through its RECAP series.
Located in the A$2 billion mixed-use Central Park development, the trio of retail centres are the last of the assets to be divested from the Frasers Property Australia–Sekisui House JV’s 12-year urban renewal project.
“The acquisition is consistent with the firm’s strategy of acquiring well-located, income-generating assets with long-term enhancement potential through repositioning,” said Suchad Chiaranussati, chairman and founder of SC Capital Partners.
The announcement comes just over four months after the private equity manager reached a final close of $850 million on its latest RECAP fund.
The investment vehicle, which has made ten previous investments, targets undervalued assets in Asia Pacific.
Joining Forces with Aussie Mates Again
SC Capital is linking up once more with the Australian fund manager after the duo jointly acquired a hotel and commercial development site in Sydney four years ago.
“SC Capital looks forward to partnering again with Fortius and building on the success of the precinct as we reimagine the next phase of Central Park Retail,” Khun Suchad said.
The three freehold assets – Central Park Mall, DUO Retail and Park Lane – have a combined gross leasable area of 14,716 square metres (158,402 square feet).
Part of A$2B Residential and Commercial Hub
Central Park Mall, which is the largest of the trio, is at the core of the award-winning Central Park complex that occupies the site of a former brewery on Broadway, a regeneration zone approximately ten minutes west of the city’s central business district by car.
Featuring vertical hanging gardens, the six-storey 2013-vintage property is anchored by a Woolworths supermarket and a cinema complex.
According to Frasers Property Australia’s 2018 annual report, occupancy last year for the 13,000 square metre mall stood at 97 percent, with the asset carrying a quoted book value of A$127 million.
The 1,100 square metre Park Lane shopping centre, which is also part of the Central Park complex, registered 76 percent occupancy last year, and had a book value of A$9 million as of the end of last year, according to Frasers.
The third asset in the set, the DUO Retail, opened this year, and has been let fully to nine fashion, lifestyle and F&B tenants.
56% Sales Growth
“Central Park Retail is at the Centrepiece of one of Sydney’s most iconic mixed-use urban regeneration projects of recent times,” said Sam Sproats, CEO of Fortius.
Sproats added that the asset’s appeal came in part from it being “strategically located in a trade area undergoing rapid gentrification and redevelopment”, which is supported by a “diverse and growing demographic with over 100,000 students in close proximity”.
SC Capital said in a statement that the Central Park precinct, which includes two residential towers and offices, has seen retail sales increase by 56 percent since 2014.
Strengthening Ties with Australia
SC Capital’s acquisition of the retail portfolio follows its purchase five months ago of an office complex in Australia’s capital city, Canberra, for A$62 million.
Teaming up with asset manager Artifex Property, SC Capital intends to carry out a A$50 million renovation of the 28,519 square metre property.
Just three weeks ago, the private equity firm marked another major Australian milestone when announced that it was launching pre-sales of its Sydney hotel and commercial development.
The proposed 59-storey tower on Bligh Street, due to be completed in 2022 and valued at A$700 million, will incorporate a 421-room hotel and 5,810 square metres of grade A offices.
In its initial hook-up with Fortius in 2015, SC and its Aussie partner paid A$68 million to buy the site from Cromwell Property Group.