Liquidity returns to funds with $1.7b of assets set to change hands
ASSET sales are now back on the agenda with at least $1.7 billion worth of properties being circled by domestic and international funds.
US group Blackstone is believed to be closer to a deal for the $1.6 billion portfolio currently owned by GE Capital. These assets include 60 Carrington Street, Sydney, and 99 Walker Street, North Sydney.
There is also speculation in the retail sector with Federation Centres, formerly Centro Retail Trust, Charter Hall Retail REIT and CFS Retail all buying and selling assets as they raise capital for new developments.
The latest to be offered is the homemaker centre Home HQ North Shore, Artarmon, with a value of about $100 million. It is being sold by unlisted Direct Retail Fund, run by Charter Hall, which also manages the listed REIT.
The sale comes on increased demand for bulky goods assets, which has grown substantially in the past 12 months, according to the latest research figures from Jones Lang LaSalle.
During 2012, 15 homemaker centres traded for a total of $613 million, compared with 11 in 2011 for $234 million. This reflects a 162 per cent increase in value terms.
The sales agents, Jones Lang LaSalle's Australian head of retail Investments, Simon Rooney, and the manager for New South Wales retail investment sales at Jones Lang Lasalle, Luke Harris, said the average bulky goods transaction size increased to $38.3 million in 2012 from $21.3 million in 2011.
"Private investors are taking advantage of this opportune time to acquire high-quality assets at attractive yields with a wide spread to debt costs," Mr Rooney said.
He said some signals were finally coming through that suggested that the lower interest rates would be likely to stimulate activity in the residential construction and retail sectors, especially in NSW.
"Consumer confidence has improved in recent months and the number of dwellings approved for development has shown an increase over the past 12 months, particularly in NSW," Mr Rooney added.