Arkadia snaps up Alexandria large format centre for $63m
The centre, located on the corner of O’Riordan Street and Gardeners Road, will compliment Arkadia’s existing exposure to the precinct, which is experiencing an influx of residential development. The sale was struck on a passing yield of about 6 per cent. Savills’ Steven Lerche brokered the off-market deal on behalf of ISPT.
Arkadia specialises in the retail asset class and today the group mandate includes more than 16 centres along Australia’s east coast, valued at more than $800 million.
The centre at 494-504 Gardeners Road sits on more than two hectares of land and has expansion potential. Built in 2003, it is leased to Harvey Norman as well as three other retailers Bed N Dreams, My Baby Warehouse and Natuzzi. There are 453 car spaces.
The 10,000 sqm Harvey Norman Clearance store provides more than 80 per cent of its gross income. With the lease expiring in October 2018, there are options in place to extend until 2038.
But if Harvey Norman chooses to leave it will also present an opportunity for Arkadia. Over the last several years Alexandria has been reshaped from a largely industrial suburb into having a new identity as a residential and retail hotspot.
Arkadia already owns the nearby Homemaker Centre Alexandria, which is a strong performing centre and is fully leased. Should Harvey Norman choose not to exercise its options it will provide an opportunity to remix and even redevelop the centre.
The centre occupies a strategic gateway position on the corner of Gardeners Road and O’Riordan Street Alexandria, and is approximately five kilometres from Sydney’s CBD and two kilometres from Sydney Airport.