Elanor Offloads Auburn Central for $129.5m


Listed real estate fund manager Elanor Investors Group has offloaded Auburn Central in western Sydney for $129.5 million following its repositioning of the retail asset.

In an announcement to the ASX, Elanor said the sale represented a 4.9 per cent premium to its book value.

Shopping centre landlord SCA Property Group snapped up the asset, 16 kilometres west of Sydney CBD, following the major refurbishment, on a fully let yield of 6 per cent.

Despite the pandemic's hit on the sector, listed-SCA had signalled earlier this year it was looking to purchase further retail assets.

Elanor said the sale realises an annual 24.5 per cent internal rate of return (IRR) over four years.

The fund manager has undertaken a similar repositioning strategy at Neeta City, the largest of three malls in Sydney’s Fairfield, which the group purchased for $85.3 million in 2019.

Michael Baliva, co-head of real estate and ERF fund manager said the sale “demonstrated its disciplined investment approach and value-add capability”, adding that the sale builds on Elanor’s track record of 20 per cent annual total return on investments.

“Since ERF acquired Auburn Central in 2016 we have been focused on executing our strategy to unlock value through actively repositioning the asset,” Baliva said.

“This has resulted in Auburn Central being converted from a large sub-regional asset to a triple-supermarket neighbourhood centre.”

In its portfolio update, Elanor said current trading occupancy is 99.5 per cent of leased area. It also noted the collection of more than 92 per cent of the rental income for the four months to 31 October.

With Covid related restrictions relaxing, the fund said trading activity across its portfolio is improving with convenience-based centres benefitting from the performance of supermarkets and non-discretionary focused retailers.

In October SCA purchased a neighbourhood shopping centre in the Northern Territory for $33 million from Woolworths on a 6.8 per cent yield.

While September saw the acquisitive Elanor pick up the Riverside Plaza shopping centre in Queanbeyan, about 16 kilometres south-east of Canberra’s CBD, for $60 million.

Auburn Central is anchored by Woolworths, Aldi and Tong Li supermarkets, with 52 specialty tenants heavily weighted to non-discretionary categories.

The sale was managed by JLL, with settlement scheduled to occur in mid-December.

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