This article is from the Australian Property Journal archive
Shopping centres owner Region Group has offloaded the East Warrnambool Shopping Centre for $20m, recording one the sharpest yields for a neighbourhood transaction.
The sale price reflects a sub 5.50% yield.
Proceeds from the program were reinvested into a $36.8m co-investment in Metro Fund and used for capital expenditure and temporary debt reduction.
Located at 1-9 Gateway Rd, the shopping centre is anchored by Woolworths along with seven specialty stores. It has a GLA of 4,319 sq m and is 100% occupied with a weighted average lease expiry of 3.9%.
Following the sale, This latest transaction follows Region also sold the sale of the Target-anchored Warrnambool Shopping Centre for $17.9m. The group also snapped up Kalkallo Town Centre for $64.5m earlier this month.
Region Group owns 88 retail properties across Australia and manages 13 Metro Fund-owned locations as of December 31, according to the company’s website.
Colliers managed the sale on behalf of Region Group.
Tim McIntosh, national director for retail middle markets at Colliers, said: “The sale of East Warrnambool Shopping Centre represents the sharpest yield for a Victorian neighbourhood shopping centre in 2024, reflecting the depth in buyer demand for highly defensive nondiscretionary retail investments as buyers forward outlook is firmly focused on interest rate reductions.”
“The Victorian retail market is at a very interesting point in the cycle, with the Australian dollar at the lowest level in 5-years, limited shopping centres offered for sale or under construction, and News Release Page 2 anticipated interest rate cuts, the stage is set for exceptional vendor outcomes in 2025.”
Following the transaction, Region will complete its capital recycling program generating $196.8m.
