Leyton Funds acquires Stirling Mall, reaches $150m in FUM

Leyton Funds has passed $150m in funds under management after paying $19m for the Stirling Mall in the Adelaide Hills.

Leyton Funds managing director Warwick Mittiga and chair John Whiteman. Picture: Alice Healy

Local property investment group Leyton Funds has boosted its funds under management to more than $150m following the recent acquisition of the Stirling Mall in the Adelaide Hills.

Anchored by a Woolworths supermarket, the neighbourhood shopping centre was acquired in an off market deal as part of a long-term plan to redevelop the centre.

Leyton declined to disclose the purchase price, but it is understood the property group paid about $19m.

Leyton Funds managing director Warwick Mittiga said the acquisition followed an active period for the group, with funds under management growing by 50 per cent since his appointment a year ago.

However it’s about quality rather than quantity for Leyton, Mr Mittiga said, as it continued to looking for buying opportunities in South Australia and interstate.

“We specifically targeted this acquisition as a retail centre with excellent existing fundamentals as well as significant scope for refurbishment and redevelopment in the medium to long term,” Mr Mittiga said.

“We set ourselves the expectation that we can discover, test and realise opportunities that others might not have line of sight of. We deliberately target off-market acquisitions and we’re not interested in paying more than someone else just to increase our assets under management.”

Leyton Funds paid about $19m for Stirling Mall in the Adelaide Hills.

The 11,500sq m Stirling site is home to a mix of tenants including Woolworths, Cibo Espresso, Baker’s Delight and speciality butcher, fish and pharmacy operators, and has more than 150 car parks.

It is 98 per cent occupied, with a weighted average lease expiry (WALE) of 5.3 years.

Leyton’s acquisition follows a string of transactions across its commercial, industrial, retail and mixed-use portfolios.

These include the Springwood Place shopping centre in Gawler East, which is anchored by a new Drakes supermarket, and offers investors average returns of 6 per cent during construction and more than 8.4 per cent once the project is completed in 2022.

Mr Mittiga said competition for South Australian commercial properties was intensifying in the wake of Covid-19.

“While our acquisition strategy is national, we’ve been able to unlock a number of attractive investment opportunities here in South Australia which have underpinned our recent growth,” Mr Mittiga said.

“In many ways, this is reflective of broader real estate trends where we are seeing a significant amount of money entering the market from interstate, attracted by the potential for stable, long-term returns and we think this will continue for some time.”

Interstate, Leyton has added new West Australian and Queensland fuel and convenience properties to its portfolio in recent months, and according to Sydney-based chair John Whiteman, the investments have started to pique the interest of institutional investors.

“Our growth trajectory means we have got to the point rather quickly where we are starting

to talk with sophisticated capital interested in a higher tier of commitment,” Mr Whiteman said.