Developer Nigel Satterley aims for $1b a year commercial pipeline
Nigel Satterley is competing with retail veterans such as Sam Gance for the wealth and attention of family offices and high net worth individuals as he drums up new investors to back up to $1 billion a year of new commercial retail and medical centre property developments.
Satterley, the country’s biggest private developer of residential land, said he and a pool of long-term investors currently held $600 million worth of commercial assets as long-term plays and he wanted to develop at least as much again each year.
“Conservatively now we’ve got $500-$600 million of these assets under our control,” Satterley told The Australian Financial Review.
“We’ve got an immediate pipeline for a further $500 million and we believe that we would have the potential, on an annual basis if we can get the sites, to develop at rate of $750 million-$1 billion per year.”
The resurgence of retail property values and hunt for wealthy investors and family offices to find long-term sources of capital value are driving a flurry of activity in retail property syndicates and funds.
Chemist Warehouse co-founders Sam Gance and Mario Verrocchi have set out to double the portfolio of National Retail Group, their property management business, to $5 billion over the next five years, tapping the assets and investment capital of family offices.
Satterley agreed – when asked – that he was competing with the Chemist Warehouse Rich Listers, but said his land development business gave him an edge when it came to developing retail and medical property assets in WA, Melbourne and south-east Queensland.
Large format retail
“We’re in competition with [Gance] and others,” Satterley said. “But we’ve got the land bank to go with it.
“We will develop neighbourhood shopping centres, convenience stores, daycare centres, large format retail – where we’ve been quite successful – then we’ll be in a position to buy existing assets that come on the market.”
Satterley’s current pool of investors is 80 per cent Australian and 20 per cent Asia-based – mainly from Singapore and Malaysia.
Each new asset will be owned by its own entity and Satterley will invest in it at the same price as external investors. The minimum investment will be $250,000, he said.
One such asset is Ellenbrook, an 8500 square metre large format retail centre with and end value of about $38 million that formally opened on Saturday. It was the location of WA’s busiest Guzman y Gomez fast-food restaurant, he said.
Satterley, who manages a fund of eight investors that owns the 40,000-square-metre Cockburn Central large format retail centre in Perth’s southern suburbs, recently acquired the adjoining 35,000 square metre site with funds from the existing owners to extend it into a $175 million end-value site.
“We made a capital call,” Satterley said. “All investors have taken up their entitlements.”
Retail property complemented the residential sites that were his core business, he said.
“These neighbourhood centres are the hub or meeting place of communities,” Satterley said.
“They’re very safe assets. A lot have additional land where you can put additional services like medical, convenience and petrol on.”
Other investors might come into syndicates owning assets that they didn’t have the capital to invest in, he said.
“You might have a family come to us that’s got this centre, that needs to be refurbished and it’s got additional land it can add to,” he said.
“They might make a decision to sell half to us and we put extra capital in. In a lot of cases we can borrow cheaper.”
