HMC goes shopping for Woolworths complex

The acquisitive funds house has kicked off its latest fund with one of western Sydney’s top centres and plans to grow it.

David Di Pilla of HMC Capital. Picture: John Feder.

David Di Pilla’s HMC Capital has tied up a deal to take control of Plumpton Marketplace in Sydney’s western suburbs in a $180m acquisition.

The purchase is the first by the fund manager’s new HMC Capital Australia Retail Partnership and signals that it will become a key buyer in the recovering sector.

The partnership was established in January with $100m of initial equity commitments ­secured from a global multi-manager and was among a series of real estate funds unveiled by the manager last month.

HMC emerged with control of the property after Woolworths secured the centre at the end of last year in order to protect its position in the Sydney growth corridor.

It paid $180m for the centre, 45km west of Sydney, with the pricing showing a yield of 4.75 per cent according to sales agent Lachlan MacGillivray of Colliers.

HMC then picked up the centre from Woolworths and is understood to have reworked key leases to get to a yield of close to 6 per cent, going forward. The 18,000sq m centre, which also includes Big W and 58 specialty stores, has 930 car spaces.

The supermarket giant had 10 years left to run on its lease and that of the Big W but did not hold an option to extend its tenure at the centre, which sits on a 5.82ha block on Jersey Road.

However, it held crucial pre-emptive rights to match rival offers for the complex, which gave it the edge against other bidders, including the funds managers who have set the pace in the retail property market.

Woolworths moved partly to ward off rival supermarket operator Coles, which is separately planning to develop an adjacent $200m mall that is expected to count Kmart as a tenant.

The property, renovated two years ago, was sold to Woolworths by TCorp, the NSW public sector fund, whose mandate was managed by Lendlease. It had picked up the centre for $136m in mid-2022.

Colliers said the transaction marked the first time the asset had traded in 25 years and represented a record yield for a subregional shopping centre.

As well as the Woolworths and Big W, the tenancies are weighted towards fresh food, takeaway, retail services and medical.

Colliers said that the depth of capital engaged to buy the centre demonstrated the continued demand for high-quality retail assets across key Australian markets.