The group has established a new managed fund, the Fairfield Centre Syndicate, for the asset purchased from Arcadia Funds Management.

The transaction recorded a passing yield of 7.8 percent and a rate of $3450 per sqm of lettable area, which is “well below its replacement cost”, according to a statement from Elanor.

Neeta City has 24,750 sqm of lettable space on a 2.2 ha site, which the group says “presents significant opportunities to add value through repositioning”.

The property sits on more than 2 ha of land, giving it development potential. Photo: Colliers International
The property sits on more than 2 ha of land, giving it development potential. Photo: Colliers International

The sub-regional centre has been identified by Fairfield Council as a key site with future development potential, though any works would be subject to approval.

The estimated fully leased net income is $7.1 million a year, generated from the two anchor tenants, Woolworths and Big W, as well as more than 70 specialty non-discretionary goods and services retailers.

Elanor’s Chief Executive Officer Glenn Willis described the asset as a “high investment quality Sydney metropolitan shopping centre”.

“Like Waverley Gardens (shopping centre), this investment further demonstrates Eleanor's strategy of acquiring high quality real estate where we see the opportunity to unlock value throughout active asset management approach,” he said, citing the $178 million purchase in Melbourne from US property group Blackstone last year.

“We have a track record of successfully repositioning assets like Neeta City to deliver strong returns for both our capital partners and our security holders.”

Elanor’s Co-Head of Real Estate Michael Baliva said the property’s fundamentals, such as location and size, meant it had capacity to grow in value.

“Neeta City has significant value-add potential given its Fairfield CBD location, ample car parking and opportunities to ‘right-size’ the retail offer to introduce more productive commercial uses.  Our strategy is focused on enhancing both the income and capital value for our Syndicate capital partners.”

Colliers International’s Lachlan MacGillivray and James Wilson sold the property.

Elanor has been active in the market recently, picking up a two-storey commercial office property at 34-50 Stirling St in Perth’s CBD for $24 million in March.

It follows the group’s first office property purchase in the Perth market of a $125.25 million A-grade office complex WorkZone West in mid-2018.

On the development front, Elanor also received approval from the ACT Government for the first stage of its $100 million upgrade of Canberra’s Belconnen Markets precinct across 3 ha.

Stage one of the project will be made up of 3750 sqm of strip retail, developed on vacant land, and is due to be completed in late 2019.

Interest in the first phase has come from mini-majors, specialty retailers and service providers.

The fund manager acquired the Belconnen Markets precinct in June 2018.

Cover Photo: The centre could generate more than $7 million a year when fully leased. (Photo: Colliers International)