This article is from the Australian Property Journal archive
A SYDNEY-based private investor has forked out $13.2 million for a Big-W-anchored retail centre in the Hunter Valley town of Cessnock.
It transacted on a passing yield of 7.6%, selling with 89% of the centre leased and returning just over $1 million per annum net. The sale price reflected a building rate of $1,648 per sqm.
The 10 Darwin St centre has 8,009sqm of gross lettable area is also home to national retailers Supercheap Auto and Repco.
Savills agents Steven Lerche and Andrew Palmer negotiated the off-market deal on behalf of a Melbourne-based investor.
The purpose-built complex is on a 19,290sqm site with 291 parking spaces. It was completed in 2006 and comprises two separate buildings, including a Big W and two specialty retailers in one building, and three large-format tenancies in the other.
Lerche said the Cessnock centre is an attractive proposition offering a strong local catchment backed by robust regional population and employment growth and a more attractive income yield than comparable metropolitan assets.
“Cessnock offered a superb opportunity for an investor to acquire a near new, well-presented and well-established regional property that requires limited management, with a solid tenancy profile, a captive market and great potential for capital growth,” he added.
Lerche sold the property off-market by approaching a few targeted investors. The property had a short WALE due to a lease tail of only 4.5 years to Big W.
“Demand for retail property investments remains at an historical high and so it was no surprise that we were able to place the property off-market, especially given the tight yields for convenience anchored centres” he said.
The sale follows Vicinity Centres’ Kmart-anchored sub regional centre, Maitland Hunter Mall achieving $22.25 million on a 6.65% passing yield in October.
Lerche and Palmer are currently marketing another Hunter centre asset, the 12,838sqm Muswellbrook Marketplace, which is anchored by Woolworths and Big W.
Australian Property Journal
