This article is from the Australian Property Journal archive
A GOOD investment opportunity has arisen in Newcastle’s retail sector with a neighbourhood shopping centre heading to market.
Raymond Terrace’s town centre-based Terrace Central Shopping Centre is expected to attract offers of over $50 million.
The centre is led by a recently refurbished 4,090 sqm Woolworths and BWS with supporting businesses The Reject Shop, Australia Post and a Medical Centre heading 23 other specialty tenants.
More than 80% of the centre’s 7002 sqm GLA and gross passing income is secured by national or chain tenants. The centre uses approximately 40% of the 17,453 sqm site.
James Wilson and Ben Wilkinson of Colliers say the high-performing Woolworths is a big drawing point for investors.
“Terrace Central Shopping Centre offers value add investors the security of a brand new 10-year Woolworths supermarket that is trading 20 per cent above Urbis benchmarks. Potential repositioning may capitalise on recent CAPEX works invested by Panthera Group, including the recent addition of Woolworths direct to boot, providing a point of difference to competing offerings in the catchment,” Wilson said.
There has been a shortage of supply in terms of neighbourhood shopping centre offerings in New South Wales. Only $386 million was recorded in NSW across 2022 neighbourhood shopping centre transactions. The state did receive a big sale in the shopping centre market this week however with the handover of Stanhope Village for $158 million.
“Colliers anticipates limited supply to continue for high quality neighbourhood shopping centre opportunities,” Wilson said.
The retail centre could pick up more traffic in the near future with significant projects heating up in the Newcastle and Hunter region.
The Newcastle Airport is undergoing a $55 million expansion while the M1 Pacific Motorway being extended to Raymond Terrace in a $2.1 billion project which will also supply more connections to Sydney.
Population in the main trade area is expected to grow by 1.5% per year from 2021 to 2041 – 3x the non-metro NSW average. Growth of the shopping centre is forecast to double by 2041. The current MTA retail expenditure of Terrace Central is estimated at $417.7 million with the 2041 expenditure projected to be $831.2 million (an annual average growth rate of 3.9%).
Terrace Central Shopping Centre is marketed via an Expressions of Interest campaign which closes at 2pm on Tuesday, 28 March 2023.
