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01-12-2014, 11:03 PM
Hot on the heels of buying a $32 million centre in South Brisbane, the group is now eyeing off Clemton Park Shopping Village, which is under development by Australand Property Group in Sydney’s inner west.
SCA looks to expand in neighbourhood malls
BEN WILMOT THE AUSTRALIAN DECEMBER 02, 2014 12:00AM
SCA looks to expand in malls
Anthony Mellowes says the fragmented market is an opportunity for SCA. Picture: John Feder Source: News Limited
WOOLWORTHS spin-off SCA Property Group is seizing the opportunity to become a consolidator in the fragmented neighbourhood shopping centre industry and is eyeing the purchase of more centres.
The group is looking to add to its 78-strong portfolio, with opportunities to buy coming from private developers, supermarket giants Coles and Woolworths and from small investors.
SCA wants to move more deeply into the neighbourhood market, where about 500 of Australia’s 865 centres are in private hands.
Hot on the heels of buying a $32 million centre in South Brisbane, the group is now eyeing off Clemton Park Shopping Village, which is under development by Australand Property Group in Sydney’s inner west.
The neighbourhood centre, to be completed in 2016, will have a 20-year lease to Coles, and is worth $45m-$50m. The sale, being brokered by Stonebridge Property Group, would show a yield in the mid-7 per cent range.
SCA, which has outperformed Woolworths since being spun off in late 2012, has emerged as one of the consolidators in the sector, alongside Charter Hall and, to some extent, Federation Centres, which is cleaning up its syndicate holdings.
“It’s very, very fragmented and that’s the opportunity for us,” SCA chief executive Anthony Mellowes said. The group has already picked up two portfolios on the back of his ties with developers. “I have dealt with a lot of these people,” he said.
SCA chief financial officer Mark Fleming added: “We like convenience-based retail centres weighted to non-discretionary segments, so food fits that, and we like long-term leaves to quality anchor tenants.”
Mr Mellowes said small developers were now coming back in the market and the supermarket chains also had centres remaining on balance sheet. Both chains are adapting to a number of forces as stand-alone supermarkets are not always the best use of sites.
Many are now anchoring mixed-use developments and they are also dealing with the emergence of German chain Aldi.
Mr Mellowes predicted a shake-out in the discount department store industry and a rationalisation of department stores, reinforcing the group’s decision to focus on food-based retailers.
SCA has identified more than $100m of development opportunities at 17 of its centres over the next five years, with most comprising small expansions. But in future the group could join the ranks of landlords looking at conversion plays across their portfolios as apartment sales boom.
“There is a number of centres that could have residential plays down the track that we haven’t investigated,” Mr Mellowes said. “Whether it’s the type of location, where they are in the city, next to train stations, etc, there is good opportunities there.”
SCA looks to expand in neighbourhood malls
BEN WILMOT THE AUSTRALIAN DECEMBER 02, 2014 12:00AM
SCA looks to expand in malls
Anthony Mellowes says the fragmented market is an opportunity for SCA. Picture: John Feder Source: News Limited
WOOLWORTHS spin-off SCA Property Group is seizing the opportunity to become a consolidator in the fragmented neighbourhood shopping centre industry and is eyeing the purchase of more centres.
The group is looking to add to its 78-strong portfolio, with opportunities to buy coming from private developers, supermarket giants Coles and Woolworths and from small investors.
SCA wants to move more deeply into the neighbourhood market, where about 500 of Australia’s 865 centres are in private hands.
Hot on the heels of buying a $32 million centre in South Brisbane, the group is now eyeing off Clemton Park Shopping Village, which is under development by Australand Property Group in Sydney’s inner west.
The neighbourhood centre, to be completed in 2016, will have a 20-year lease to Coles, and is worth $45m-$50m. The sale, being brokered by Stonebridge Property Group, would show a yield in the mid-7 per cent range.
SCA, which has outperformed Woolworths since being spun off in late 2012, has emerged as one of the consolidators in the sector, alongside Charter Hall and, to some extent, Federation Centres, which is cleaning up its syndicate holdings.
“It’s very, very fragmented and that’s the opportunity for us,” SCA chief executive Anthony Mellowes said. The group has already picked up two portfolios on the back of his ties with developers. “I have dealt with a lot of these people,” he said.
SCA chief financial officer Mark Fleming added: “We like convenience-based retail centres weighted to non-discretionary segments, so food fits that, and we like long-term leaves to quality anchor tenants.”
Mr Mellowes said small developers were now coming back in the market and the supermarket chains also had centres remaining on balance sheet. Both chains are adapting to a number of forces as stand-alone supermarkets are not always the best use of sites.
Many are now anchoring mixed-use developments and they are also dealing with the emergence of German chain Aldi.
Mr Mellowes predicted a shake-out in the discount department store industry and a rationalisation of department stores, reinforcing the group’s decision to focus on food-based retailers.
SCA has identified more than $100m of development opportunities at 17 of its centres over the next five years, with most comprising small expansions. But in future the group could join the ranks of landlords looking at conversion plays across their portfolios as apartment sales boom.
“There is a number of centres that could have residential plays down the track that we haven’t investigated,” Mr Mellowes said. “Whether it’s the type of location, where they are in the city, next to train stations, etc, there is good opportunities there.”
