This article is from the Australian Property Journal archive
A MELBOURNE-based private investor has snapped up Kerching Capital’s Coles-anchored Ferny Grove Shopping Village for $19.5 million.
The prime 9,098sqm corner property at 51 McGinn Road, around 12km out from the Brisbane CBD, boasts a 4,423sqm established neighbourhood shopping centre with a circa 2,359sqm Coles supermarket.
This is in addition to national retailers including BWS, Domino’s Pizza, Terry White Chemist and Jett’s Fitness, plus further health and food and beverage offerings.
Michael Hedger and Joe Tynan from CBRE managed the off-market deal, with the sale price reflecting a 5.72% passing yield.
“The buyer has been actively looking in the market for over 12-months and was drawn to the significant future value-add proposition of the shopping centre and Coles’ long-term commitment to the centre,” said Hedger.
While the vendor, WA-based Kerching Capital, picked up the shopping centre asset in April 2018 for $16.2 million.
The site is zoned District Centre and boasts 200 metres of frontage along both McGinn and Archdale Road, sitting between Ferny Grove State Primary and High School.
According to CBRE, investment volumes are 64% below the three-year quarterly average, reflecting underutilised demand for supermarket-anchored neighbourhood shopping centres in well-established growing residential catchments.
With CBRE Research from July found the neighbourhood sector has continued to dominate the total national sales volume, as investors look for resilient assets with predictable cash flow in these economic conditions.
“The challenging construction environment, coupled with uncertainty in the debt market has kept the development pipeline for neighbourhood centre’s subdued which has shifted the investors seeking new assets to established assets that offer value add,” added Hedger.
With Cushman & Wakefield’s recent Capital Markets Marketbeat report showing the retail sector leading commercial real estate investment, with its strongest performance since 2021, attracting $3.8 billion in investments.
With major deals including a 50% share changing hands in each of Westfield West Lakes ($174.75 million, Westfield Tea Tree ($308 million), Claremont Quarter ($207 million), Lakeside Joondalup ($420 million) and Westfield Whitford City ($195 million).
“Retail assets in metro locations remain highly desirable given the significant underlying land value and diverse tenancy mix across essential services and daily need retailers. Ferny Grove ticked all the boxes as a full-service shopping centre and attractive investment opportunity,” said Tynan.
