$20m Coolbellup Village sale

Perth-based property syndicator APIL Group has added another retail asset to its portfolio with the purchase of Coolbellup Village Shopping Centre.

Located south of Perth in the City of Cockburn, the centre opened in December 2018 and is anchored by a Woolworths.

Coolbellup Village is also tenanted by five specialty stores, providing a total gross-lettable-area of 3,768 square metres on a 8,925sqm corner site, which also comprises 180 car bays.

The site was previously owned by developer The Cooby Hotel Pty.

The $20.5 million off-market deal was negotiated by JLL director of sales and investments Sean Flynn and head of sales and investments Nigel Freshwater, who said the transaction represented the fourth metropolitan neighbourhood centre sale so far for WA. 

Other centre transactions since the start of the calendar year to have settled are FRP's $41 million play for Yanchep Central, and the $10 million sale of Glenfield Shopping Centre to an undisclosed buyer. 

The $6.8 million sale of the Lesmurdie Village Shopping Centre was announced earlier this month. 

Anchored by an IGA and supported by 15 specialty shops, the centre has a total GLA of 2,505 square metres and generates close to $420,000 per annum in passing net income, which JLL said reflected an initial yield of 6.13 per cent, with potential to achieve about $500,000 wen fully leased. 

“Coolbellup Village only opened in December 2018 in what we understand to be the last 15-year lease struck by Woolworths in Western Australia, which delivered a centre weighted-average-lease-expiry (WALE) of over 11 years for the buyer,” Mr Flynn said.

“With such low exposure to vacancy risk, a strong Woolworths covenant, defendable retail trade catchment and long WALE, we fully expected the site to achieve the lowest yield ever realised for a neighbourhood shopping centre at a little over 5.5 per cent.”

Mr Freshwater said while that yield was believed to be a record for a shopping centre sale in WA, recent transactions in New South Wales and Victoria had achieved yields below 5 per cent.

“… notwithstanding the investment fundamentals of a new Woolworths anchored metro neighbourhood centre are in essence the same whether it’s situated in WA or these other states,” Mr Freshwater said.

“Having only recently announced WA’s third neighbourhood centre sale for 2021 with Lesmurdie, we are very pleased to have closed out the state’s fourth neighbourhood centre sale for the year with Coolbellup Village, and we’re now firmly focused on releasing more quality retail opportunities for a growing list of keen buyers heading into the second half of the year.”

Mr Freshwater said APIL was a seasoned operator who was active nationally and that Coolbellup Village represented an attractive opportunity for the syndicate, delivering a higher projected annual return than would have been achievable for a similar asset in Sydney or Melbourne, effectively without any additional risk.

The acquisition adds to APIL’s already established portfolio of nine neighbourhood shopping centres and large format retail centres, which includes Floreat Forum Shopping Centre, West Leederville Shopping Centre, Kinross Central Shopping Centre and Joondalup Gate.

APIL is the 11^th largest retail asset owner in WA, according to the Business News Data & Insights list of shopping centre owners, as ranked by total GLA across all centres.   

The group also own commercial property, including CBD office tower 30 The Esplanade, and an office building at 50 Kings Park Road, in West Perth.