Cadence Managing Director Charlie Buxton said more than $2 million was committed on improving the asset’s infrastructure and modernising the centre’s internal and external facade. The works assisted in securing the centre’s anchor tenant Harvey Norman for another seven years.
“An aggressive capital works strategy, rebrand program and active management approach had helped to unlock the site’s potential,” said Mr Buxton.
Rebranded as Sunshine Square, the 6ha site located just 14kms from Melbourne’s CBD, is opposite the Albion train station in Sunshine’s town centre and located adjacent to a major Bunnings superstore. The property benefits from a zoning for high-density commercial and residential development.
“We understand this location very well and saw an opportunity to add value to an asset that had received limited investment and attention over the years,” Mr Buxton said.
“Despite the uncertainty around the economy, property values and the retail industry, large-format retail has shown resilience and we recognised this site’s strong underlying land value and future redevelopment potential with Sunshine poised to become the capital of Melbourne’s west.”
Since the initial acquisition, Cadence has leased the tenancies to national discount variety retailers Cheap as Chips for 2,020sqm and Total Tools for 2,845sqm, in addition to releasing the key anchor tenancy to Harvey Norman for 7,300sqm.
Assembly Funds Management Chief Executive Officer Michael Gutman said “We are delighted to have joined Cadence in the acquisition of Sunshine Square. The asset has an attractive income profile and the mid to long term strategic opportunity afforded by its activity centre zoning and location near the new Sunshine superstation is proving to be an excellent early investment for ADPF1.”
Leedwell Property retail specialist Chris Parry, who negotiated the new Sunshine Square leases, said the tenancies cemented the centre’s position as a major shopping precinct within Sunshine.
“Cheap as Chips and Total Tools are a fantastic fit for Sunshine Square and will help drive foot-fall to the centre, which has been one of our key goals in the leasing program,” he said, noting recent lease transactions for similar-sized showrooms in the area ranged between $150 – $200 per square metre, per annum, plus outgoings.
A tender process is underway for the State and Federal government-funded $13 billion Melbourne Airport Rail Link, which will link Tullamarine to the CBD via a new Sunshine superstation.
The local market has seemingly responded to the positive effects this project will have on the local area, with a private property investor paying $22 million in October 2020 for a 1950s office/warehouse facility at 501-503 Ballarat Road. Located opposite the Sunshine Square centre, the rate of approximately $1,000/sqm is a 56% increase on the $640/sqm paid by Cadence and Assembly for their site in May 2020.