This article is from the Australian Property Journal archive
CENTRO has put the Keilor Downs sub-regional shopping centre in Melbourne's north-western suburbs on the market with a price tag of $70 million plus.
Centro has appointed Savills Australia’s Pat De Maria and CBRE’s Mark Wizel to sell the property by expressions of interest closing Thursday 29 March 2012 at 2pm.
Located at 80 Taylors Rd Keilor Downs, the property comprises 19,052 sqm and is anchored by Kmart which recently signed a new 10-year lease, Coles, ALDI and two mini majors together with approximately 57 specialty tenancies, seven ATMs, 10 kiosks and two fast food pad sites.
De Maria said the centre’s approximate net passing income of $5.9 million (fully leased) had the potential to be significantly enhanced by the development of more than 5 ha of vacant land on the site.
“Subject to council approval, the vacant land provides a tremendous ‘in-fill’ development opportunity, on the same title, offering the purchaser numerous value-add opportunities including additional retail or mixed use including subdivision or rezoning subject to council approval.
“Given the established residential location and the flexibility the property’s three extensive street frontages provide, alternative uses might include residential, retirement, aged care, bulky goods and commercial or a mixture of such uses,” he added.
Constructed in 1990 on a 13.97 ha site, the centre was extended in 2004 to include ALDI, the Reject Shop and a number of specialty stores.
Wizel said he expected strong enquiry as demand for most sub regional assets in Victoria has remained quite strong for close to a decade now, with a number of private investors and institutions actively seeking acquisition opportunities driven by the relative strength of the Victorian economy.
“In times of economic uncertainty retail property is regarded as a defensive investment due to the large percentage of non-discretionary spending supporting income streams such as groceries, liquor and medical related goods,” he continued.
According to MacroPlanDimasi, the total retail spending market generated by the main trade area population is estimated at nearly $800 million in 2011, including nearly $250 million from primary sector residents. Over the forecast period to 2021, the spending market is projected to increase on average by 3.5% per annum, reaching over $1.1 billion for the main trade area.
Wizel also said the development potential associated with the 5 ha vacant land provides investors with a significant value add proposition.
“For these reasons we expect the asset will draw interest from both institutions and high net worth individuals including offshore investor groups,” Wizel said.
Savills and CBRE have recorded $2.6 billion of shopping centre transactions nationally in the 12 months to December 2011, with Victoria accounting for $1 billion worth of those transactions.
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