Assembly Funds Management is buying Ed. Square Town Centre for $248m.
The Lowy family-backed Assembly Funds Management is looking to expand its retail property empire with the purchase of Ed. Square Town Centre in Sydney’s southwest for $248m.
The firm has a strong pedigree in retail property, launching seven years ago with former Westfield executive Michael Gutman at the helm.
The company has built up a strong track record and is taking on larger retail assets, partly because they offer better value and many institutions are still selling down to trim their gearing or pay redemptions.
Assembly last year teamed up with US investment house PGIM Real Estate to buy Woodgrove Shopping Centre in the western Melbourne suburb of Melton for $440m and is again being backed by the offshore group.
That purchase, from funds manager QIC, marked Assembly’s entry into the top end of the retail market and brought the firm into the institutional orbit after it initially relied on wealthy backers.
Singapore-owned Frasers Property Australia put Ed. Square Town Centre at Edmondson Park on the block in April.
The move came as big-ticket retail assets dominate sales in the sector this year.
The area has been resilient in the face of the federal budget, rising interest rates, Middle East conflict and higher costs.
Large sales including a 50 per cent stake in Westfield Marion in Adelaide and Melbourne’s Greensborough Plaza, show the market’s strength.
Frasers is selling stabilised retail assets as it is pouring capital into its housing and commercial projects. It sold Eastern Creek Quarter, also in western Sydney, to the listed Vicinity Centres for $400m, in May. It earlier sold Burwood Brickworks Shopping Centre in suburban Melbourne to an HMC-managed fund for $107m.
Ed. Square Town Centre is a major shopping, dining and entertainment destination in Sydney’s southwest growth corridor.
The retail precinct is next to the Edmondson Park transport interchange and is a hub for food, dining and entertainment in Frasers’ $1.5bn Ed. Square mixed-use estate.
Simon Rooney of CBRE handled the expressions of interest campaign. “The sales process was highly competitive and generated significant inquiry and competitive bidding from both private and institutional investors, highlighting the depth of capital targeting high-quality metropolitan retail assets,” he said.
Ed. Square has grown sales since opening in 2021, capitalising on population and spending growth in Sydney’s southwest. It spans 24,502sq m and has 89 specialty stores and 926 parking spaces. It is anchored by a Coles supermarket, TK Maxx, and Event Cinemas. It has nine mini-majors and 78 specialty stores across retail, dining, entertainment and services.
Steve Bulloch, head of Australia, real estate at PGIM, said Ed. Square Town Centre offered “strong underlying fundamentals”. “Its blend of daily-needs and entertainment retail, combined with direct integration with key transport infrastructure, positions the centre to significantly benefit from an increasing catchment over time,” he said.
Tim Meurer, chief investment officer at Assembly, noted the centre’s strong metrics. “With an attractive basis relative to replacement cost, we believe the asset offers compelling long-term potential for our investors, which will be enhanced by our active asset management approach,” he said.
PGIM’s Real Estate Investment Group, the world’s second-largest real estate investment manager, and AFM, the Australian real estate private equity manager, have set up a partnership and operating platform to pursue more high-quality retail opportunities.
Frasers Property Australia executive general manager investment and capital transactions, Mark Gleeson, said Ed. Square Town Centre played an important social, entertainment and retail role in the local community and wider region.