Brickworks Marketplace sold to FRP Capital for $85m

Fund manager FRP Capital is eyeing a potential development of the Brickworks Marketplace in Adelaide after splashing out $85m to buy the shopping centre site.

Property fund manager FRP Capital has completed its $85 million acquisition of Adelaide’s Brickworks Marketplace shopping centre from Charter Hall and Telstra Super.

The transaction was struck at a yield of 5.43 per cent, as investors continue to circle convenience-based retail assets amid ongoing inflationary pressures across the economy.

Development of the Brickworks centre, a sub-regional mall in Adelaide’s inner west, was completed in 2015.

Its 17,300sq m of net lettable area is anchored by Woolworths, Big W and Dan Murphy’s outlets, with 40 specialty stores and 680 car parks.

FRP Capital is targeting a net annual distribution to investors of 6.07 per cent.

The acquisition adds to the Adelaide-based fund manager’s growing portfolio of retail assets, which includes the Carramar Village and Yanchep Central centres near Perth, and Centennial Plaza in southern NSW.

The Brickworks Marketplace has sold for $85m. Picture: Supplied by JLL

FRP Capital director Benjamin Fusco said the firm would look at a range of value-add opportunities at the Brickworks site in Adelaide’s inner west, including “strategic leasing and tenant remixing”, as well as potential development of the 4.44ha site.

“Flagship centres on significant land-holdings, within a 5km radius of capital cities, do not come up very often,” he said.

“We are delighted to have secured this rare and high-quality asset, which further strengthens our growing portfolio and brings our funds under management to over $250m, with commercial property assets in South Australia, Western Australia and New South Wales.”

Charter Hall Retail REIT (CQR), which held a 50 per cent stake in the Brickworks centre alongside Telstra Super, said the sale price represented a $4.9 million, or 6.1 per cent, premium to its book value at December 2022.

Charter Hall Retail chief executive Ben Ellis said it was a “strong outcome” for the vendors.

“The sale was the result of an unsolicited offer and demonstrates the underlying quality and the strong demand for CQR’s Convenience Plus retail assets,” he said.

According to JLL figures, Brickworks is the seventh sub-regional shopping centre across the country to be sold in the first half of 2023.

JLL’s Nick Willis, who brokered the off-market deal alongside colleague Sam Hatcher, said well-located sub-regional shopping centres on large land-holdings were generating strong interest from investors.

“We continue to experience a strong resurgence from capital towards the sub-regional sector, with transacted volumes over 40 per cent above the five-year average for the first half of 2023,” he said.

“Capital is attracted to the relative return spread this sub-sector is providing, in addition to the robust performance and value-add potential.”