This article is from the Australian Property Journal archive
INVESTORS continue to circle convenience and neighbourhood retail assets, with a private investor snapping up a Woolworth-anchored centre one hour west of Brisbane for $35.55 million, on a healthy yield of 5.1%, in a campaign which attracted over $450 million in offers.
A record $2.56 billion in neighbourhood shopping centres changed hands in 2021 as investors essential services assets anchored by the major supermarkets.
Fernvale Village attracted 14 offers and over 170 enquiries in the campaign handled by CBRE’s Michael Hedger and Joe Tynan together with Colliers’ James Wilson and Stewart Gilchrist, on behalf of a private investor.
“The on-market expressions of interest campaign engaged over $450 million in value of offers from institutional and private capital, highlighting the depth of market for Queensland neighbourhood shopping centres,” Gilchrist said.
Woolworths is supported by The Reject Shop and 13 specialty stores with a total gross lettable area of 5,824 sqm.
The entire site spans 2.93 hectare and includes 1.15 hectares of vacant land with DA approval for an additional 3,285 sqm of retail gross floor area.
“There was significant demand due to the asset’s standing as a rare core-plus opportunity; an existing shopping centre anchored by a high-performing supermarket, with a turn-key development opportunity providing immediate capital value uplift,” Gilchrist said.
Hedger said the purchaser’s interest was driven by the growth of the catchment area, which includes a proposal for an estimated 2,000-plus additional lots and significant infrastructure expenditure.
Fernvale Village is home to the only major full-line supermarket within a 20 kilometre radius.
Neighbourhood shopping centre yields compressed 70 basis points in 2021, according to CBRE, while BIS Oxford Economics had them for the first time firming below sub-regional yields, driven by the growing investor demand for essential service retail investments underpinned Woolworths and Coles.
That has carried into the new year for metropolitan and regional assets. Coolum Park Shopping Centre on the Sunshine Coast sold for $32.5 million, on a yield of about 4.5%, while in Sydney’s outer north-west, a private investor set a record sale price for a Sydney neighbourhood centre, snapping up a Woolworths-anchored asset in Schofields for $37.5 million at a tight yield of 3.75%.
Market Plaza in Sydney’s Chipping Norton also sold, with the $37.4 million sale price representing a yield of 4.75%.
