Elanor Retail Suffers Big W Loss
The Big W discount department store announced the closure of the first 3 of 30 stores (out of 183) today affecting Chullora, Auburn and Fairfield stores. Woolworths said it had reached agreements with landlords – Elanor (Fairfield and Auburn) and Jones Lang LaSalle (Chullora) – to close the three stores in January 2020.
Woolworths indicated that the 30 stores selected are those that have the lowest sales per square metre and highest rent per square metre in the network. Woolworths are seeking to negotiate their way out of the leases.
For Elanor, the departure of Big W from 7,159sqm in Auburn Central comes 4 years ahead of the lease expiry and provides Elanor with an opportunity to re-position the Centre.
Elanor confirmed that they have negotiated a surrender payment with Big W that will cover the expected rental downtime whilst they redevelop the space to provide for a second supermarket and additional specialty stores.
Elanor have also obtained an updated valuation for the property on an "as if complete basis" at $101.5m which would provide an increase in NTA of ERF of $0.12 per security.
With respect to Fairfield, Elanor only acquired the Neeta City Shopping Centre in March 2019 for $85.3M, and the prospect of the store closure would have been considered as part of the sale. Elanor have not however made any comments in relation to this centre however Big W will vacate the Centre in January 2020.