This article is from the Australian Property Journal archive
FUND manager ISPT is continuing its retail asset divestment program, putting the triple-supermarket anchored Market Central Lutwyche up for sale alongside co-owner Abacus, five years after the centre underwent a $77 million redevelopment.
Situated on 2.5 hectares of land in an affluent inner north Brisbane suburb, Market Central Lutwyche is convenience-focused retail offering with a strong weighting towards non-discretionary, services, food and government tenants.
Supermarket anchors Coles, Woolworths and Aldi together generate over $121 million in sales and are supported by two mini-majors, 29 specialities, 10 kiosks and 14 office tenancies.
The centre has 760 undercover car spaces with two access points, providing permanent and temporary car parking income.
Market Central Lutwyche underwent a $77 million redevelopment completed in 2019 that included a refurbished Coles, the introduction of a full-line Woolworths supermarket and relocated Aldi supermarket, a medical precinct and an office hub predominately secured by government-funded tenants.
The redevelopment is expected to deliver significant depreciation benefits with approximately 33% of first-year fully leased net income sheltered by depreciation allowances, as estimated by PEP Solutions.
The site also offers a long-term land bank opportunity, with mixed-use zoning and a height limit of up to 12 storeys.
Stonebridge’s Carl Molony, Philip Gartland and Justin Dowers alongside JLL’s Nick Willis and Sam Hatcher, have been exclusively appointed to sell Market Central Lutwyche via an expressions of interest campaign.
“The demand from capital for prime metropolitan assets such as Market Central Lutwyche is extremely strong particularly in a market where the supply of assets publicly available for sale has reached a new low,” Molony said.
“The centre is among a rare collection of triple-supermarket anchored shopping centres being one of only three triple supermarket neighbourhood centres in Queensland and one of only eleven nationally.”
Willis said Market Central Lutwyche will be the first institutional-grade retail opportunity to be offered to market in metropolitan Brisbane this year, with a significant reduction in formal on-market opportunities in 2024 following a strong finish to 2023 that saw around 60% of all of the year’s transactions occur in the final quarter.
Brisbane is extremely tightly held for core non-discretionary based offerings, with the majority of owners being privates and long-term owners, Hatcher said. Over the last five years, only three neighbourhood centres above $100 million in Brisbane have changed hands.
Market Central Lutwyche’s main trade area catchment boasts an average per capita income 35.8% above the Greater Brisbane average. It is only centre to provide two full-line supermarkets in the main trade area. The agents said this outlines the significant under-representation of supermarket floor space in the catchment, which is 48% below the Greater Brisbane benchmark.
ISPT selldown continues
For ISPT, the offering is the latest in a string of retail divestments in its shift away from the retail and office sectors towards industrial, health and life sciences.
In October last year, it sold the Brisbane CBD home of fast fashion giants H&M and Uniqlo, 170 Queen Street for $145 million, just as it put a portfolio of four key retail assets and an office building to the market with combined expectations tipping around $600 million.
The retail assets include Melbourne’s GPO building, The Strand Melbourne, Halls Head Central and Eastgate Bondi Junction. It has since Eastgate Bondi Junction to Charter Hall for nearly $127 million, and more recently the Coles and Aldi-anchored Halls Head Central sub-regional centre for $70 million to Centuria Capital Group, at 40% below replacement cost.
In March, it put the Coles and Aldi-anchored Dee Why Grand neighbourhood centre in Sydney to the market, which could net $65 million.
