This article is from the Australian Property Journal archive
THE Watervale Shopping Centre in Taylors Hill is set to enter the market, after record levels of activity in the neighbourhood shopping centre market over the last year.
Sitting 22km north-west of the Melbourne CBD, the 5,286sqm shopping centre is anchored by a 3,388sqm Woolworths supermarket, in addition to medical and health offerings and 17 non-discretionary specialty stores.
Stuart Taylor, Tom Noonan and Sam Hatcher from JLL, along with James Douglas from CBRE have been appointed to sell the asset via an expressions of interest campaign, on behalf a private local investor, who is be advised by Mark Wizel of Advise Transact.
“We are anticipating significant interest in the asset, with a range of institutional and private capital sources converging on the neighbourhood sector, with limited availability of high-quality centres, particularly in metropolitan locations,” said Taylor, senior director of retail investments at JLL.
The 18,700sqm parcel of land, located on east-west arterial roadway Taylors Road, the property also includes parking for up to 254 cars.
“The asset provides a highly resilient tenancy mix, underpinned by a long-term lease to Woolworths, expiring in 2030 with two further 10-year options, a strong medical offering and in-built fixed annual specialty rental reviews, key investment considerations driving buyer interest in this sector,” said Douglas, senior national director at CBRE.
The centre sits within in Melbourne’s north-western growth corridor in the Melton City Council, which is amongst the countries fasted growing municipalities, with growth expectations exceeding 365,000 residents by 2041.
The shopping centre currently services an established trade area of 84,500 residents, with an annual growth of 38,800 individuals between 2021 and 2036 projected.
Additionally, the trade area’s retail expenditure is at $1.2 billion and is expected to grow by 4.9% each year to $4.2 billion by 2036.
“Whilst we have seen significant yield compression in this sub-sector in the past 24 months, pricing metrics for neighbourhood centres remain attractive relative to prime assets in the office or industrial markets,” added Douglas.
Across the country 2021 saw demand for the asset type skyrocket, with transactions reaching a record $2.9 billion last year, a 47% increase on the five-year average, according to data from JLL.
“Suburban retail assets have typically been dominated by private investors because of the lower yields, but REITS, unlisted funds and offshore investors are now active buyers in this sub-sector. The primary reason is the defensive stability of these assets and investors’ appetite for capital preservation in an environment vulnerable to external shocks,” concluded Taylor.
In the popular asset class market, Coles Group recently put the freshly completed Rochedale Village shopping centre in Brisbane’s southern growth corridor up for sale, while an expansive a 6,000sqm landholding in Nowra, NSW with redevelopment potential into neighbourhood shopping centres was offered.
