This article is from the Australian Property Journal archive
ISPT is offloading another key Sydney shopping centre, tipping the Coles and Aldi-anchored Dee Why Grand to the market amid low numbers of properties on the market and growing appetite for non-discretionary assets.
Dee Why Grand is a rare dual-supermarket neighbourhood centre offering within 15 kilometres of Sydney’s CBD and has been put for grabs just a few weeks since the announcement of its near-$127 million sale of the Eastgate Bondi Junction sub-regional centre to Charter Hall.
At Dee Why Grand, the supermarket heavyweights are supported by two mini-majors and 29 specialties and kiosks across 9,976 sqm of lettable area, on a northern beaches landholding of about 3.5 hectares. Selling agents Nick Willis and Sam Hatcher of JLL and Stonebridge’s Carl Molony, Philip Gartland and Justin Dowers said this makes it difficult to replicate the scale of the shopping centre and protects the property from new competitive threats.
Aldi was introduced in 2020, and The Reject Shop in 2022. Following a recent $3.7 million common mall refurbishment, the centre’s tenant profile has increasingly been weighted toward non-discretionary uses, with 94% of the income underpinned by grocery, food, health and services.
Molony said investment market institutional and private capital remains very focused on non-discretionary tenancy mix and the strength of anchor tenant covenants.
The agents said that amidst growing demand for retail property due to improving underlying fundamentals of the asset class, Dee Why Grand is being marketed formally for sale at a time where “supply of assets publicly for sale reaches a new low”.
Willis said, “following a strong finish to 2023 where almost 60% of total transactions occurred in the final quarter, 2024 has seen a substantial reduction in formal on-market opportunities for sale.
“Dee Why Grand will mark the first formal Sydney metropolitan institutional grade opportunity to come to market, of which we expect strong local and offshore interest.”
The listing is part of ISPT’s shift from away from the office and retail sectors towards industrial, health and life sciences. In October last year it sold the Brisbane home of fast fashion giants H&M and Uniqlo for $145 million.
According to JLL, supply of institutional grade assets will be the greatest challenge for investors in 2024 as the formal supply pipeline – particularly for assets over $100 million – remains ultrathin.
Only four comparable dual-supermarket neighbourhood centres in this kind of proximity to the CBD have changed hands since 2010. ISPT has held and managed the property for nearly 10 years.
The expressions of interest campaign runs until 3rd May.
There is momentum in the neighbourhood shopping centre market nationally. In the past week, Woolworths-anchored Victorian Wyndham Vale Square and Drouin Central sold to private investors for a combined value of over $45 million, while Coles Group offloaded the recently-constructed Huntlee Shopping Centre in the Hunter Region of NSW for $33 million.
Coles Group has also listed the 2021-completed Andergrove Village Shopping Centre in Queensland’s Mackay for sale, while the construction arm of rival Woolworths put up for sale a neighbourhood shopping centre in Clarkson, north of Perth for sale that was formerly a Bunnings Warehouse.
