This article is from the Australian Property Journal archive
PERTH-based RG Property has offloaded The Village Dandenong shopping centre in Melbourne’s south-east to a Chinese private investor for $29.1 million, reflecting an initial yield of 5.19%.
Occupying a 18,790 sqm site, the Village Dandenong is a convenience-based neighbourhood shopping centre anchored by a 3800 sqm Woolworths Supermarket and BWS Liquor and supported by 15 specialty retail tenancies.
The off-market transaction was brokered by JLL’s Stuart Taylor and MingXuan Li on behalf RG Property.
The transaction represents the 5th Victorian neighbourhood shopping centre sale to be completed in 2020, three by JLL, totalling $118.93m and an average weighted initial yield of 5.47%.
Taylor said the strong pricing achieved in this off-market transaction confirms the robust demand for non-discretionary retail assets.
“The neighbourhood shopping centre market has demonstrated liquidity in the first half of 2020, with pricing remaining firm. Transactions have been driven by the defensive nature of the income streams and the continued ability to access cheap debt,” he added.
RG Property CEO Rhett Williams said the completion of the transaction builds upon the group’s track record of identifying value opportunities and executing on those strategies.
“These assets are being viewed as an investment ‘safe-haven’ in the current climate given they derive the majority of their income from essential service businesses such as Woolworths and Coles supermarkets.
“Supermarkets outperformed during the peak of the pandemic in March, with monthly retail trade growth of over 23.0%. Despite the ABS preliminary retail trade figures for April falling by 17.9%, food retailing figures remained higher than in April 2019.
“Even with the proven strong demand for these assets, vendors are still favouring the off-market method of divestment in the current climate.” Williams said.
