Real Asset Management (RAM) is pleased to announce the successful sale of The Hub Westlake in Queensland for $11.46 million to a private investor. The asset was formerly part of the listed RAM Essential Services Property Fund (ASX: REP).
This sale demonstrates the resilience of well-positioned essential services retail property assets, showing a $1.4 million increase in value from acquisition despite subdued conditions in the commercial property market. Harry Dever of Colliers handled the transaction on behalf of RAM.
Matthew Strotton, RAM’s Executive Director and Head of Real Estate, remarked, “This is good momentum for the REP portfolio. Despite an unpredictable economy and high-interest rates, investors consistently seek exposure in assets that house non-discretionary retail and healthcare. Executing this sale at book value is a pleasing result.”
Anchored by SPAR, the convenience retail centre is also tenanted by a dental surgery, a GP clinic, a pharmacy, a coffee shop, a swimming school, and a swimming pool equipment retailer. It is situated in the suburb of Westlake, 20km south-west of the Brisbane CBD.
Doug Rapson, RAM’s Director, Funds Management, emphasised the property’s robust leasing dynamics as a pivotal factor in its valuation.
“The diverse revenue streams derived from both essential services retail and healthcare tenants, coupled with long-term leases, undoubtedly piqued the market’s interest. The Hub boasts an 8.3-year WALE by income and has traded at a circa 6 per cent yield. Such stable returns are attractive to investors in the current financial landscape,” Rapson said.
This sale is a strategic component of REP’s proactive capital management initiative aimed at positioning the fund favourably for debt management and other capital management initiatives including the ongoing pursuit of new properties. Disposing of mature, ex-growth assets with completed developments provides additional balance sheet and capital management flexibility.
“We have moved to a more active ‘capital recycling’ stance, preparing to move nimbly on growth opportunities as they emerge. In addition to the sale of The Hub, we are in advanced stages of diligence for the divestment of two more portfolio assets at a combined book value of $20 million,” Strotton said.
“This will enable the progression of our 2024 agenda which was flagged to our investors during last week’s results roadshow.” Strotton concluded.