THE sale of two significant suburban shopping centres in Perth will test investor enthusiasm for the state government’s new retail property planning policy.
THE sale of two significant suburban shopping centres in Perth will test investor enthusiasm for the state government’s new retail property planning policy.
Dianella Plaza and the Phoenix Shopping Centre in Spearwood are being marketed for their redevelopment potential despite the retail sector’s lacklustre performance in the first half of this year.
Both of these centres stand to benefit from the government’s new activity centres policy, which has abolished the old caps on retail development in a bid to develop integrated town centres with a blend of residential and commercial uses and strong links to key transport arteries.
The policy is expected to further bolster investor interest in retail property, which is already being targeted by east coast investors as evidenced by the sales campaign for Geraldton’s biggest centre, Northgate.
Savills WA divisional director city sales and investment Miles Rowe said the campaign for the centre, which is anchored by Target and Coles, attracted five bidders made up of a combination of institutional investors, a syndicate and private investors.
“The response we had on Northgate was very strong and we have that in exclusive due diligence to a party right now,” Mr Rowe said.
“And all the interest for that property came from the eastern states.”
Savills is also the agent for Centro Dianella, which includes a parcel of almost 1.8 hectares of land around the old tavern.
Stirling City Council has already outlined its draft proposal to transform the centre and some adjacent council land into a ‘vibrant’ town centre with residential developments, health facilities and a new hotel.
Mr Rowe would not comment on the likely sale price but one industry analyst suggested it could attract bids of up to $60 million.
“The days of people just buying shopping centres on tight yields and parking them are gone, there has to be an angle and an opportunity to achieve some double digit growth in the medium term,” Mr Rowe said.
“That often comes through excess land with redevelopment potential or a lack of competition and market dominance.”
The Phoenix Shopping Centre has an ongoing development application that could add as much as 7,775 square metres to the property as the population of the southern corridor expands.
CB Richard Ellis WA managing director Peter Agostino said a lot of Australian funds were interested in retail centres in Western Australia, particularly properties they could add value to.
He said sub-regional shopping centres rarely came onto the market in WA and were predominantly held by large institutional owners.
The last major shopping centre sale in Perth was Lend Lease’s acquisition of a parcel of retail properties from the ING retail portfolio, including Harbourtown, Lakeside Joondalup and the Armadale shopping centre.
CB Richard Ellis and Colliers International have been appointed joint selling agents for the Phoenix centre, which market sources suggest could fetch about $85 million.
