This article is from the Australian Property Journal archive
A RARE dual-supermarket anchored neighbourhood shopping centre has sold for $86 million, in one of the biggest-ever deals seen in the Australian retail sub-sector.
Perth-based private investor RG Property sold Park Ridge Town Centre in southern Brisbane, having acquired it in 2012 as a single-supermarket-anchored centre. In 2016 it undertook a major extension and upgrade of the centre to include an expansion of Woolworths as well as the addition of a new Coles supermarket, and it now features a Prices Plus mini-major, 31 specialty tenancies, and KFC and Ampol pad sites, with a total of 14,300 sqm of gross lettable area on 6.24 hectares of land.
“We were pleased to deliver a strong result for investors as this syndicate comes to an end. We have been able to deliver robust cash flows as well as strong capital growth over the life of this investment,” said an RG Property spokesperson.
Savills’ Peter Tyson and Steven Lerche brokered the deal, struck at a passing yield of just above 6%, after receiving over 190 buyer enquiries through an expressions-of-interest campaign, in another example of the ongoing appeal of assets underwritten by non-discretionary retail.
Local, interstate and offshore investors all made enquiries, Tyson said.
“As a dual-supermarket anchored centre, Park Ridge Town Centre is unique in today’s marketplace. Invariably neighbourhood shopping centres feature single supermarkets. The scale and dominance of this high-performing centre relative to its peers was obvious.”
The buyer was attracted to the centre’s dominance and strategic location in a major residential growth corridor, with 55% of its income stream underpinned by Woolworths and Coles. It was put to the market with net income of $5,198,533 per year, and a weighted average lease expiry of 8.13 years.
Deal-making has slowed down in the retail sector; transactions have slumped by more than 50% year-on-year according to The Data App, although several supermarket and supermarket-anchored assets have traded recently.
Coles has just offloaded a 2018-built freestanding supermarket in Melbourne’s leafy inner-east suburb of Camberwell for $37 million, on yield of 4.42%, while the supermarket giant also sold the 5,743 sqm Schofields Village neighbourhood centre in Sydney’s outer north-west for $53 million, on a 5.5% yield. Cap rates for smaller everyday needs types of centres, albeit having increased, remain low by historical standards.
Meanwhile, Coles’ rival Woolworths has divested Dakabin Shopping Centre, north of Brisbane, for $40 million, on a 5.55% yield, and the Bannockburn Village Shopping Centre, between Brisbane and the Gold Coast, for $26 million, at 5.52%.
