The recently completed Dickson Village mixed-use development in Canberra’s inner north has been sold for $157.5 million in one of the biggest commercial property deals of the year.
Aware Real Estate, the property investment arm for Aware Super and its real estate partner Barings, has bought the seven-storey retail and apartment development from Canberra developer Tony Pan’s TP Dynamics, which only completed the long-awaited project last month.
The ground floor shopping complex is anchored by a Coles full-line supermarket, with a Liquorland store on a new 12-year lease and 10 specialty shops.
Above there is parking for residents and five levels of 140 build-to-rent apartments, to be managed by Brisbane-based Essence Communities.
It is believed to be the first completed BTR project in Canberra to change hands.
The sale price of $157.5 million reflects a 6 per cent fully leased forecast yield for the retail centre and BTR apartments.
The transaction was brokered by CBRE’s National Retail Director James Douglas, ACT Managing Director Nic Purdue and Associate Director Tristan Cotchett.
Mr Douglas said the acquisition was a highly strategic investment, based on what was forecast to be a high-performing Coles supermarket on a long-term term lease and a BTR offering expected to be in high demand due to Canberra’s tight and expensive rental market.
Mr Purdue said high-quality assets like Dickson Village were rarely traded in the very tightly held Canberra market.
“The project’s completion is well timed to capitalise on strong rental growth in the Canberra residential sector, underpinned by the low level of vacancy and increased demand from the private and health sectors, as well as the student market,” he said.
Mr Pan said his team at TP Dynamics had worked tirelessly to deliver an exceptionally high-quality retail and BTR asset.
“We are very pleased with the outcome and look forward to seeing this asset prominently feature in Canberra’s institutional investment market,” he said.
Aware Real Estate’s CEO Michelle McNally said the purchase was a good example of Aware Real Estate’s focused investment strategy to target locations around existing and new infrastructure that it believed would drive long-term demand and underpin capital growth.
“With a real estate portfolio of around $2 billion, we are excited to further expand into the Canberra market with Dickson Village,” she said.
Barings Executive Director Shaun Hannah said Dickson Village would benefit from significant gentrification and infrastructure investment, including recently completed light rail infrastructure.
Build-to-rent, encouraged by ACT Government planning and tax policies to provide more rental accommodation, is becoming an increasingly popular option for developers.
Under the BTR model, a development is purpose-built to provide rental accommodation that can be long-term and secure.
The government wants to attract 5000 extra rentals to the Canberra market through its Build-to-Rent prospectus to industry and a range of incentives that could include lease variations and land tax concessions.