CommercialClare BurnettFri 09 Oct 26
Forza Doubles Value in $118m Melbourne Homemaker Site Flip
Forza Capital has achieved more than double the amount it spent acquiring a Melbourne homemaker centre in 2023.
Epping Home & Life, a Large Format Retail (LFR) centre on 560 High Street, is 17km north of the Melbourne CBD in the Epping Metropolitan Activity Centre.
It sits on a 7.48ha site in Melbourne’s northern growth corridor.
Forza Capital acquired the centre off-market from the ASX-listed HomeCo Daily Needs REIT for $54.25 million. It recently sold the site to a private investor for $117.7 million.
The deal is thought to be the largest LFR transaction in Australia this year, transacted by Stuart Taylor, Nick Willis and Tom Noonan of JLL.
Forza undertook a repositioning campaign, rebranding the 26,550sq m centre and taking on a new masterplan.
It also added 7121sq m of floorspace and reset its tenancy mix with national and publicly listed retail tenants.
An additional 14 national retailers were signed or renewed, including Officeworks, TK Maxx, Petbarn and Planet Fitness. There are also construction works under way for incoming Rebel Sport and Supercheap Auto stores.
According to JLL, 84 per cent of gross income comes from national and chain retailers, with 56 per cent backed by ASX or globally listed covenants.
Net income increased from about $4.5 million to $7.3 million as a result of the reset. Structured annual rental increases of 3 and 4 per cent across the income profile are built in.
When it was acquired by Forza Epping Fund, the centre had a weighted average lease expiry of 1.7 years and passing rents were around 29 per cent below market rate.
After the investment and repositioning program, WALE was extended to 7.82 years with occupancy close to 97 per cent.
The sale price is expected to deliver fund investors an internal rate of return of about 10 per cent per annum.
Settlement is expected in early 2027.
Forza Capital co-founder Adam Murchie said it was a good result in a “difficult investment climate”.
Forza fund manager Jeremy Gray said the fund acquired the asset below land value with a short WALE and under-rented income.
“Those were precisely the levers we set out to pull to generate value for our investors,” he said.
“That value uplift was secured through the execution of a comprehensive active value adding asset management strategy.”
Employee-owned Forza Capital has about $946 million of funds under management.
Forza has also dabbled in office space, recently putting its Brisbane CBD tower at 340 Adelaide Street on the market.
