13/08/2019 - 15:56

CBRE leads in shopping centre sales

13/08/2019 - 15:56

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Neighbourhood shopping centres and supermarkets are drawing significant investor interest, with more than $140 million worth of transactions occurring in 2019.

CBRE leads in shopping centre sales
Trinity Village has claimed the title of highest-value neighbourhood centre transaction in 2019. Photo: Silvertone Photography

Neighbourhood shopping centres and supermarkets are drawing significant investor interest, with more than $140 million worth of transactions occurring in 2019.

Commercial agency CBRE has been most active among the major agencies, having been involved in six transactions each worth more than $15 million.

The latest deal was the sale of Trinity Village Shopping Centre in Alkimos, which was sold for $34 million.

Other high-value deals included the $27 million sale of Woolworths Banksia Grove and the $22 million sale of Coles Orana.

The transaction activity builds on a standout 2018 for neighbourhood shopping centre sales, with Colliers International data showing 11 centres changed hands for a collective value of $284 million.

While cautious consumer sentiment had affected the overall retail market, with vacancy rates creeping higher and rental growth moderating, Colliers International retail investment services director Ben Tana said offshore and domestic demand in neighbourhood shops remained strong.

“The composition of neighbourhood centres, where more than 50 per cent of the net lettable area is occupied by a national supermarket tenant, offers a lower-risk profile for investors who are acquiring an asset with a long lease to a stable tenant,” Mr Tana told Business News.

Mr Tana said neighbourhood centre yields were also getting sharper, particularly for assets that provided value-add opportunities through future redevelopment.

“The 2018 sale of Flinders Square in Yokine is a good case study,” he said.

“The Coles-anchored centre is five kilometres from Perth’s CBD and its underlying land value contributed significantly to investor interest.

“Colliers International received a huge level of interest during the sales campaign and it sold for $39.5 million, which was 21 per cent above book value on a yield of 6.1 per cent.”

Mr Tana said he anticipated more transactions in coming months, with the Western Australian market being closely watched by offshore funds, high-net worth buyers and syndicates.

“Offshore buyers see WA as a safe place to invest and their acquisitions demonstrate confidence in the long-term fundamentals of the market and a commitment to having a presence in WA’s retail industry,” he said.

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