By anyone’s measure, it was a great result.
The sale of Tuggerah Supa Centre in New South Wales has just settled and it is a real cause for celebration.
The final sale price was $10,800,000. That’s $3,260,000 more than we paid for it in June 2016 — but the best part is, we only put in $4,220,000 while the bank lent us the rest. So, on our own invested money this sale represents a gross capital gain of 40% in 18 months. For our investors, it’s a 40% NET return over the 18 month period.
How did we achieve this return? It wasn’t by accident.
Tuggerah Central was a perfect positional play.
To begin with, we completed a robust due diligence investigation ahead of purchasing this property so we went in with full knowledge of the potential risks but with our eyes firmly focussed on the potential upside.
We identified a small window of opportunity to activate redundant lettable area in a neglected asset. We outlined and quickly started on a plan to reinvigorate the assets presence to the road with brand new signage and a much higher, impressive façade upgrade to help attract and secure the right tenant. Installing a massive new pylon sign and increasing the external façade of the vacant building to the maximum allowable height radically improved visibility from the road and helped reposition the whole centre.
Tenants like to see massive change and this building has always been vacant. So our challenge was making the asset ‘pop’ enough for tenants to forget their old perceptions of the asset as one which “would never lease”. We had to completely reframe their perception and this meant big, bold steps rather than tip-toeing.
We had a strong vision for the centre and did not delay in engaging market leaders along the way to buy into our vision and assist with the leasing and development works.
Effectively, we’ve brought a redundant centre back to life, creating an attractive place for national retailers in Tuggerah. Tuggerah Tiles leased 400 square metres and we secured another long lease to a national furniture retailer, Oz Design, across another 1,237 square metres.
The Properties & Pathways team would like to thank our investors for their faith in this project. We’re thrilled with the result and we’re sure you are, too.
If you’re looking to invest in a commercial property syndicate like the Tuggerah Supa Centre, get in touch.