Retail and Mixed-Use
Highfields Village is a convenience based centre anchored by Woolworths and 20 specialty stores servicing a growing community in Toowoomba’s northern suburbs. In 2009, at a time when the GFC was in full force, the incumbent financier for the asset, was looking to recover their investment in full from our client, causing incredible stress to the family investment group.
DMA Partners was engaged to provide property development expertise, creating a strategy to work through this difficult issue and help our client navigate asset refinancing and repositioning in an uncertain market.
The client was deeply committed to retaining ownership of the asset but this was a time when yields were impacted and valuation was significantly compromised. At the same time, a drive through pad site opportunity had been identified with a national operator and DMA was asked to assess the feasibility of proceeding with the project.
After scratching the surface, what we found was something much bigger. Strong performing tenants including Woolworths, under market rents and land to expand; all coupled with a growing community, a gap in the market and an under serviced catchment that was demanding more services.
DMA worked on a development strategy and mapped out the potential for repositioning the asset into something more substantial to meet the market. This was the catalyst to refinance the asset via a tender to the market and a new financier was secured to proceed. DMA then led and managed the repositioning of the asset over the next 8 years until 2017.
The development strategy identified many opportunities to reposition the asset which included:
(1) A new hardware building and major tenancy remix
(2) Negotiating and building and extension to the Woolworths tenancy
(3) Development of a new F&B precinct
(4) The conversion of an original architectural sculpture into a thriving care tenancy
(5) A new petrol pad site, and
(6) A business park
DMA Partners became the owner’s development partner and managed all elements of the development including major tenant leasing and finance negotiations, to procuring and managing the builders of the various expansion and repositioning projects. With this knowledge and insight we were also well placed to undertake all tenant leasing negotiations and tenancy delivery over the 8 year period. We did this successfully until a decision was make by the client to divest of the asset at the peak of the market.
When we commenced our involvement, the asset value was $15 million. Over the following 8 years of value adding and careful asset management, we finally managed the sale of the asset with JLL for $41 million at a yield of 6%.
We are immensely proud of our partnership with our client, the Stirling family, and the result we were able to achieve working side-by-side over the life of this asset repositioning project. The project was the first in a long line of successful retail projects that DMA has advised on and delivered since 2008.
“We appointed DMA just after the GFC had hit and there was significant uncertainty in the market and particularly with our funder. We found DMA was the only firm of their kind that provided end-to-end development services. The market is full of project managers but this is only part of what DMA does. Their professionalism, experience and knowledge of development has directly contributed to delivering an institutional grade asset and to achieving such a strong result for Lauder.”
Lauder Pty Ltd