Sydney firm Blackfox Property buys Toowoomba’s Fantastic Furniture, Centrepoint precinct in deals worth $26m

In a sign of Toowoomba’s evolution as a regional powerhouse, a fast-growing Sydney investment firm has made its first moves into the city’s commercial property market. Here’s why:

A major interstate private equity firm has started making moves in Toowoomba by snapping up two major assets, in a sign of the city’s growing profile among Australian property investors.

Sydney investment fund manager Blackfox Property has been revealed as the new owner of Centrepoint commercial precinct on Prescott Street and the Fantastic Furniture outlet on Bridge Street in North Toowoomba, in deals worth a combined $26m.

The purchases form part of a significant 12-month acquisition phase for Blackfox, which represents the equity of hundreds of wholesale investors.

This includes cornerstone investor David Schwartz, who cofounded Primewest, a $5.2 billion funds management business sold to Centuria.

Sydney firm Blackfox Property has bought Centrepoint Toowoomba on the corner of James and Prescott Streets for more than $16m.

Firm managing director Greg Edelmuth, who himself held senior roles in AMP Capital and Lendlease before helping form Blackfox in 2023, said investors were starting to look away from metropolitan areas to find promising assets in regions like Toowoomba.

Greg Edelmuth, managing director of Blackfox Property.

“It’s the second-largest inland city after Canberra and we like large regional centres,” he said.

“We also like locations with strong population growth and Toowoomba’s is stronger than Sydney and Melbourne.

“It’s also higher than the Australian average for income growth, and that means people are coming in looking to spend money.

“Major infrastructure investment is important, and the government is showing Toowoomba is an important area for commerce.

“We like assets that are close to major metropolitan areas, and being 90 minutes out of Brisbane, it’s a great way to drive internal migration and trade growth.”

Mr Edelmuth said retail and industrial assets were key areas of focus for both the firm and investors, which had shown significant interest in both of their Toowoomba purchases.

“Our investors are high net worth individuals looking for strong returns and (we believe) we can enter regional centres with attractive results,” he said.

“We’ve grown significantly in the past year, from 30 to 40 investors initially to about a couple of hundred, and we have now got the support of of reputable wealth managers that have invested with us too.

“We’ve acquired six assets in the past 12 months (worth about) $100m but more importantly delivering investors attractive returns, underwritten by strong lease covenants and high yields.

“Both Toowoomba opportunities were significantly oversubscribed and that’s because investors like the underlying thesis and both opportunities delivered strong returns, with cash yields of eight percent.”

The acquisitions have seen a renewal of tenant leases at higher rates, coinciding with significant investment into revamping the properties in a bid to improve sales.

Mr Edelmuth said this was because Blackfox’s investors had an interest not just in the yields but also the capital gains as well.

“(In the case of Centrepoint) we believe the tenant mix there is great, but the opportunity is to improve the asset, drive better performance for businesses and therefore increase rents closer to market,” he said.

Sydney firm Blackfox Property has bought Toowoomba's Fantastic Furniture commercial precinct in North Toowoomba for $10m.

“We’ll take over the asset and drive better outcomes, which means tenants can afford to pay more rent because their businesses will perform better.

“We’re not in the business of putting people out of business — we’ve been relatively conservative, but we’ll be able to buy an asset and spend some money improving it.

“We believe our investors need to know the assets and the risks, so we pay monthly distributions, but following those distributions, we’ll maximise the returns and on-flow those to the investors.”

Blackfox Property cornerstone investor David Schwartz.

With Fantastic Furniture settled and Centrepoint to reach that point by next month, Mr Edelmuth said Blackfox was not done with Toowoomba yet, both in terms of property and potential new investors.

“Our strategy is we like to continue to invest in markets, because once you’re in, you start to meet people and find new opportunities,” he said.

“Our plan is to acquire a couple more assets this year (across Australia) — we’re agnostic to where we acquire the assets, we’re only interested in markets with characteristics we like, showing strong growth opportunity.

“We’re a growing business, we’d like to bring on more like-minded investors that believe in the same fundamental principles and even through the purchase processes, we had local investors interested in coming on-board.

“We have been significantly oversubscribed in each opportunity.”