This article is from the Australian Property Journal archive
TWO supermarket anchored shopping centres in the Gippsland region have entered the market, as demand for neighbourhood shopping centres stays strong in regional Victoria.
The properties, Coles Morwell and Bairnsdale’s Eastwood Village Shopping Centre are being sold by separate private investors, with the sale of both properties to be managed by JLL.
The sales will be via a public expressions of interest campaign, managed by JLL’s Tom Noonan, Stuart Taylor and MingXuan Li.
The 5,265sqm shopping centre, Coles Morwell, has a secured 15-year net lease to Coles and Liqourland, with an additional seven non-discretionary specialty stores.
“Coles Morwell provides investors the opportunity to secure a long lease to a strong trading Coles supermarket paying percentage rent providing ongoing rental growth and income security,” said Noonan, director of retail investments at JLL.
The Morwell site is also supported by a 1.1-hectare undercroft car park with capacity for 259 vehicles and is also a mere 250m from the Morwell Train Station.
“Over 90% of the gross rent is secured by Coles who recently undertook a $5 million store refurbishment highlighting the highly secure nature of this income stream and investment opportunity,” added Taylor.
Eastwood Village Shopping Centre is also anchored by a supermarket, with Ritchies Supa IGA, the modern neighbourhood centre also has a medical centre and 11 additional specialties.
“The centre provides an ideal tenancy mix underpinned by supermarket, medical and pharmacy tenants who contribute in excess of 70% of the gross income. Ritchies is Australia’s largest independent supermarket chain and performed extremely well over the past 12 months recording a 14.7% increase in sales to $1.25 billion,” said Noonan.
Eastwood, which is in the heart of East Gippsland, is a new suburb in the city of Bairnsdale, with median house prices amongst the highest in the area, while also benefitting from the trend towards treechanges during 2020.
JLL anticipates both properties receiving a high volume of enquiries and interest from private, syndicate and offshore investors looking for resilient investments with essential service tenants.
“The recently announced 50% stamp duty concessions available for commercial property in regional Victoria is driving heightened demand for shopping centre assets in Victoria’s major regional towns,” added Taylor.
m3property’s latest National Retail Report saw neighbourhood centres as contributing 32% of all retail asset sales over 2020, marking this asset type as safe in the face of major disruptions to the market.
“Ongoing demand for defensive retails assets from a range of private and institutional capital sources, is driving more competitive pricing and yield compression,” said Taylor.
Shopping centre transactions are also recovering from the impacts of 2020, with transaction volumes bouncing back to pre-pandemic levels, especially in assets presenting as defensive.
“Supermarkets and neighbourhood centres have proven to be the most popular retail sub-category with yields expected to compress further in 2021” Taylor added.
