This article is from the Australian Property Journal archive
LISTED shopping centre owner, Region Group is looking to offload three Woolworths-anchored, convenience and essential service-based retail assets, including the first time in more than two years investors can secure a sub-$30 million Woolworths-anchored neighbourhood centre in either Melbourne or Sydney.
The three assets consist of Wyndham Vale Square in metropolitan Melbourne’s western suburbs, Drouin Central in Melbourne’s outer east, and Leura Shopping Centre in the Blue Mountains suburb of Leura.
All three assets offer long-term leases to Woolworths, supported by complementary speciality tenant uses, and extremely defensive income profiles. Each of the assets offer strong underlying land values in highly strategic retail locations, according to JLL agents Sam Hatcher, Nick Willis, Stuart Taylor, Tom Noonan, and David Mahood, who have the listing.
“With all of the assets anchored by Woolworths and vast majority of income derived from non-discretionary and essential services, we continue to see very strong demand for this retail sub-sector due to the highly defensive and secure nature of the income streams,” Hatcher said.
“Neighbourhood shopping centres such as these are often referred to as ‘recession proof’.”
Taylor said the offering represents a significant opportunity for shopping centre investors, amid extremely low supply of quality assets being presented to market. Transaction volumes of neighbourhood centres across Australia are down approximately 72% year-to-date on 2022, and 80% on the record high volumes seen in 2021, according to JLL data.
Taylor said the trend is primarily attributable to “near zero supply of purchasing opportunities”.
The properties are expected to generate interest from predominantly private investors which dominate the sub-$30 million price bracket.
“We expect these offerings to be strongly contested, given their attractive investment fundamentals and the opportunity they provide purchasers to acquire best-in-class retail, at a very attractive price point,” Hatcher said.
The freehold interests will be offered to market individually later this month, via expressions-of-interest.
Recent neighbourhood centres to change hands include Woolworths Bomaderry for $40 million, on a 5.43% yield, which was developed and recently completed by the supermarket giant, while the Coles-anchored Greenacre Village is being shopped around after becoming the first metropolitan Sydney supermarket to be formally offered to the market in 2023. JLL also has that listing.
Colliers sold Woolworths Bomaderry.
Also put to the market have been a Coles supermarket in Launceston that is the first freestanding supermarket in Tasmania’s second-largest city to hit the market in more than seven years, offered through JLL and Stonebridge, and the Trinity Village centre in Perth’s Alkimos, which set a benchmark yield when it was last traded four years ago.
