This article is from the Australian Property Journal archive
A TASMANIAN family has snapped up Glenorchy Plaza, paying nearly $20 million for the Big W-anchored Hobart shopping centre.
Located just in the city’s north-west, the 8,276 sqm plaza was built in 2005 and is supported by 14 complementary tenancies that include Australian Hearing, Hobart Pathology, Radiology Tasmania and Flight Centre. It has 302 parking spaces and there are a further 350 spaces in the Glenorchy City Council car park opposite.
The centre sold at a market yield of 7.5% and comes with a weighted average lease expiry of 2.1 years.
Colliers and Elders managed the $19.75 million sale on behalf of Elanor Investors.
Competition from interstate investors, predominantly from Victoria who have Tasmanian assets within their portfolio, and a combination of private investors and fund managers based in Melbourne and Sydney, which highlighted the growing retail investor appetite given the strong retail fundamentals afforded by Hobart, according to Colliers agents James Wilson, Tim McIntosh and James Lawson, and Elders’ George Burbury and Scott Newton.
“Historically the national retail investment market has recorded one DDS anchored shopping centre annually. Investors target the retail sub-sector typically due to their comparatively attractive yield afforded despite ASX top 10 majors covenant, combined with the large strategic landholding they occupy,” Wilson said.
More than half of Tasmanian retail investments above $10 million are owned by Victorian private investors.
“The cohort of Victorian investors seeking out retail assets in Tasmania that are backed by ASX-listed tenants has increased substantially in the last two years, driven by the tightly held nature of retail investments across Victoria,” McIntosh said.
Burbury said the of Glenorchy Plaza is another indication of the attractiveness of the overall Tasmanian commercial market, with purchasers able to buy properties significantly below replacement cost.
He said that while increased interest rates have resulted in less discretionary spending, the Glenorchy Plaza tenancy mix – mainly medical, convenience and service retail – has resulted in the centre continuing to perform strongly.
He added that with limited retail vacancies coming to the market and very little new stock under construction, it is likely that retail vacancy rates in neighbourhood centres will remain low and rental growth will occur as national tenants continue to expand to Tasmania.
