This article is from the Australian Property Journal archive
AUSTRALIAN Unity’s Diversified Property Fund is looking to offload the Busselton Central neighbourhood shopping centre in Western Australia’s south west, one year after completing a $45 million makeover.
The 13,295 sqm convenience-based centre is the focal retail asset within the tourist area, and is anchored by a strong performing Coles supermarket and a five-screen Reading Cinemas complex, both on long term leases.
In addition to Reading Cinemas and Coles, which is expected to pay percentage rent in the short-term, the centre includes four mini-major tenants and 31 speciality tenants.
Major tenants are secured to 2033 and the weighted average lease expiry by gross lettable area is 7.4 years, while offering strong tax depreciation potential.
“Busselton Central provides a rare opportunity to acquire a near new, dominant and strong performing centre, which is set to enjoy real sales and income growth courtesy of its rapidly growing trade area and superior offering,” said CBRE’s James Douglas, who is marketing the property with Stonebridge agents Phil Gartland and Justin Dowers.
The centre was recently value as at March 31 2024 at $86 million. The agents expect interest from a range of private, syndicate and institutional investors.
The centre occupies a land-rich site of over 30,000 sqm in the heart of the town centre and there are angles for intensification and value add, Gartland added, with the centre featuring a excellent on-grade parking and destinational retailers which are a major draw card for both local resident and tourist shoppers.
Located at the gateway to the Margaret River, and the largest population centre in the region, the total trade area of 66,276 people is forecast to grow rapidly, at close to three times the Western Australian average over the next seven years. Retail sales in the trade area are forecast to reach $2.58 billion by 2041, reflecting average annual growth of 4.2%.
Busselton Central offers many tenants that are not available anywhere nearby, according to Dowers, “cementing it as an essential offering in the region”.
“The continued growth in tourism is a major driver for the town, especially with the airport expanding its capabilities and offering flights from Melbourne and Sydney.”
Expressions of Interest closes Wednesday, 24th July.
Circa $1.5 billion in retail transactions have been completed in Western Australia since 2022.
In the neighbourhood shopping centre sub-sector, the Riverton Shopping Centre last month became just the second in the state to change hands in 2024, selling in an off-market deal for $9 million, following Collie Central Shopping Centre in the south-west selling for $10 million earlier this month to Queensland-based property syndicate Natgen, on an initial yield of 7.98%.
A few weeks ago, developer Cedar Woods have sold two hectares of shopping centre land in Perth’s Eglinton to Woolworths’ development arm Fabcot for $13 million.
Elsewhere, convenience-based retail property owner Region Group has just divested the Soda Factory in Brisbane’s West End for $42 million, just above book valuation and on a capitalisation rate of 6.25%, shortly after acquiring 10,469 sqm convenience-based neighbourhood centre Cooleman Court in Canberra for $74 million.
Charter Hall Retail REIT offloaded Rutherford Marketplace in the Hunter Region of NSW for $49.75 million, at a small premium to book value.
