This article is from the Australian Property Journal archive
ANCHOR tenant Woolworths has acquired Mordialloc Plaza from the Singapore-based Chen family, in a $41 million deal reflecting a sharp 4.39% yield, as major Melbourne suburban retail assets continue to be snapped up, and investors start to accept lower returns from their assets.
CBRE’s Mark Wizel, Justin Dowers, Lewis Tong and Kevin Tong, in conjunction with Ken Smirk from Knight Frank, negotiated the sale.
The single-level, 4,532 sqm neighbourhood shopping centre is on a 6,600 sqm site at 600 Main Street, the single level, and comprises the full-line Woolworths supermarket, 11 specialty shops and direct exposure to Main Street, with access to upwards of 120 car spaces.
The property was sold with an estimated fully leased net income of $1.8 million, with the Woolworths lease running until 2025 with three, seven-year options.
Wizel said the transaction meant seven sales from seven campaigns since March from the CBRE team, with $1.792 billion worth of capital across 56 offers received.
He said retail assets with a focus towards convenience and non-discretionary tenants remain highly sought after, given their track record of weathering fluctuations in economic trends.
“But it is also about the fact that retail assets provide exceptional value, both now and into the future, in a market buoyed by the strongest sustained population, read catchment, growth in the nation,” he added.
Recent CBRE sales include the sale of the Coles supermarket in Clayton for $17.115 million at a 2.57% yield, and in recent weeks that of the Woolworths Hadfield for $11.75 million at 3.57%, both to local investors. Another freestanding supermarket, the Coles at 434 Maroondah Highway in Ringwood East, was sold by JLL this week for $8.505 million at a 5.25% yield.
Maroondah Village shopping centre recently traded for $18.8 million at a 4.6% yield, while last month Colin De Lutis acquired The Village Bacchus Marsh shopping centre for $61.65 million at 7%, and a mainland Chinese purchases paid $43 million for the Highlands shopping centre at sub-5.4%.
Down the highway, the 10,443 sqm Bellarine Village shopping centre in Geelong’s Newcomb has just sold for $36.5 million following a campaign that drew 127 enquiries, and Torquay.
Dowers said pre-Easter Amazon hype had done very little to dampen the enthusiasm of investors trying to secure retail investment assets, while investors had accepted the inevitability of sub-5% yields.
“A key part of this has been the recognition that most of these assets offer exceptional underlying land value and long-term potential around further development of sites, which are almost invariably in the heart of town.”
Dowers said the seven retail assets sold by CBRE had come at a 4.76% average yield.
Australian Property Journal