This article is from the Australian Property Journal archive
THE fully leased Burwood One sub-regional shopping centre in Melbourne’s east has been put to the market in one of the biggest single-asset retail offerings of the year, and is expected to attract added interest for its development potential.
The 26,598 sqm two-level centre is on a 58,780 sqm site at 172-210 Burwood Highway, Burwood East, and is anchored by 24-hour Coles and Kmart sites, and an Aldi supermarket with a 10-year lease, complemented by six mini-majors, 51 specialties and two ATMs.
CBRE’s Mark Wizel, Justin Dowers and Lewis Tong are marketing the centre on behalf of a Melbourne family.
The agents said more than $270 million in retail transactions had occurred since March through CBRE, and that with addition of the $117 million Leopold Gateway centre, the Burwood One sale could take Victoria sales this year to “well in excess of half a billion dollars”.
CBRE’s sales have come at an average yield of 4.82% and Burwood One currently returns around $9.5 million.
“Given its size, location, tenancy profile and growth potential –both in terms of its current guise and future site development potential – this is the sort of asset which will attract a very strong field of buyers and that competition could drive a yield not seen before for an asset of its kind,” Wizel said. “Location is of course critical to shopping centres and there is no doubt that the success and growth of Burwood One is largely attributable to its relatively close proximity to what has been for decades Melbourne’s demographic centre (Glen Iris).”
He said the combined drawing power of the centre’s tenants had arguably driven the success of numerous high density residential developments in the vicinity, further enhancing the catchment and securing its position into the future.
The property is 14 kilometres east of the Melbourne CBD, and is close to Deakin University, the Monash Freeway and EastLink, and a tram route passes the front of centre. Local municipality, the City of Whitehorse is expected to grow from 176,554 to 207,424 by 2036.
Dowers said the underlying land value of such assets was coming increasingly into focus as buyers, particularly those with plans to hold an asset for the long term, looked to take advantage of any potential upside.
“Where a site is within the centre of town this has the potential for a substantial mixed-use development down the track. In the meantime, the owner has an asset which provides a not insignificant income stream.”
Meanwhile, two Woolworths supermarkets in Melbourne’s eastern suburbs will be offered for sale by CBRE at its next portfolio auction on August 8, including at nearby 42-50 Burwood Highway, also in Burwood East.
The freestanding supermarket of 3,400 sqm is on a 1.51-hectare site with 394 parking space and brings in $832,000 per annum net.
Also on offer is the 6,977 sqm site at 1381-1387 Ferntree Gully Road in Scoresby, leased to Woolworths until 2030 with additional options of 10+5+5 years, and returns $673,000 per annum net.
They expected to realise more than $32 million.
Australian Property Journal
