Renowned developers & shopping centre owners Revelop acquire key sub-regional shopping centre development site – set to be the first new sub-regional development in Sydney in over 20 years.

Salta Properties exits its shopping centre development site at Jersey Road, Plumpton in an off-market transaction for $20 million, which had a total project value over $200 million.

The sale was exclusively handled by JLL’s Retail Investments Australia’s Nick Willis and Sam Hatcher in a direct off-market deal to local Sydney developers and shopping centre owners Revelop.

Salta Properties acquired the land which adjoins Lendlease managed Plumpton Marketplace back in 2005. Over this period, the vendor gained development approval for a substantial 17,686 sqm Sub-Regional Shopping Centre development in 2018 through the Land & Environment Court.

Mr Willis said “Core landholdings in Sydney metropolitan locations for shopping centre developments are extremely rare. The majority of these sites are acquired by the operators, Woolworths & Coles, due to fierce competition for key trading locations”.

The project, previously known as Plumpton Gardens, will deliver a state of the art brand new sub-regional shopping centre that will cater for the burgeoning growth in the western Sydney market. The 36,900 square metre site, which is located along Jersey Road, is located approximately 36km from the Sydney CBD and is well connected to the M7 & M4 Motorways. The proposed development, known as Plumpton Gardens will deliver a state-of-the-art brand new sub-regional shopping centre that will cater for the burgeoning growth in the western Sydney market.

Anthony El-Hazouri, founder of Revelop notes “The acquisition of Plumpton Gardens development site is in line with our growth strategy for the business. We continue to acquire shopping centres and development sites in key locations which will deliver strong total returns and are supported by long term macro trends of strong population growth, improving gentrification, and limited new retail floor space supply.”

Mr El-Hazouri continued; “A brand new sub-regional shopping centre has not been built in Sydney for over 20 years. In this time the retail landscape has vastly changed and evolved. This opportunity provides us with a clean slate to deliver what will be a state of the art in the sub-regional sector and meet the demands of today’s customer.”

Charbel Hazouri, founder of Revelop said “The site has been held in the Salta family for almost 20 years, we look forward to taking a proactive approach to the development and delivering a best-in-class centre that will service the growing demand from the local community. We have a connection to western Sydney and are attracted to the strong growth fundamentals that it provides for retail. This acquisition adds to our portfolio in the region including Stanhope Gardens and Emerton Village.

Mr Hazzouri commented, “There is very strong tenant demand in the area given there has been very limited development – our new centre will deliver the best-in-class retail and provide the residents a premium offering to which has not been available to them in the past. We have some big announcements to make in the coming weeks and our intention is to commence development as a priority.”  

Mr Willis from JLL commented on the underlying supply and demand imbalance that is occurring in the sector; “Approximately 1.13sqm of retail space has been created per additional person in Australia based on the population growth profile. The Australia population is forecast to grow by 1.5% p.a. over the next five years, or by 2.1 million people.

Using the 1.13 sqm historic ratio as a scenario, Australia will require between 2.06 and 2.58 million sqm of retail floor space to match the population growth over the next five years. However, there is currently only 285,700 sqm in the supply pipeline under construction, which equates to just 0.14 sqm per additional person.

Per capital supply is likely to be lower in the future than in the past, partly because of higher ecommerce market share. However, ecommerce still only accounts for less than 13% of total retail spending. Even in a low case scenario assuming a 0.50 sqm ratio (less than half the historical rate), that would still result in underlying demand for an additional 1.03 million sqm of retail floorspace over the next five years to match population growth of 1.5% per annum. The undersupply of retail floor space and strong population growth will be a major driver of sales productivity and therefore income growth.

This is driving the continued strong performance for the sector where we have now two consecutive reporting seasons for positive leasing spreads across all the major retail REITs and vacancy in Australia fast approach historic low levels, following that of the American market which is now experiencing the lowest level of vacancy in history.”

Mr Hatcher from JLL notes “when markets are turbulent, it often provides opportunities to gain access to assets which rarely exchange hands. The retail sector is experiencing a resurgence in demand as capital looks for more stabilised pricing (vs. traditional office & industrial), supportive demographic tailwinds, and an ability to diversify income streams through redevelopment into alternative uses”.

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Salta Properties Western Sydney sub-regional shopping centre development site sold $20m by JLL