$180m deal sealed for Burwood One shops

An international investor has splashed more the $180 million on the Burwood One shopping centre.

The Burwood East complex on the prominent corner of Burwood Hwy and Blackburn Rd was snapped up by a Melbourne-based buyer from Hong Kong.

Owned by the Hansky family for 26 years, the shopping centre is home to Australia’s oldest Kmart store which opened in 1969.

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The 58,780sqm site had been expected to fetch up to $200 million.

CBRE national director Mark Wizel says the mega deal was a record for a suburban shopping centre, when the income it generated was stacked up against its sale price.

The Burwood One shopping centre in Melbourne sold for $180 million.

“The buyer that has acquired Burwood One did so accepting a return of about 5% annually,” he said.

“The return is the lowest ever recorded for a shopping centre of a subregional nature.”

Wizel says this meant the buyer has paid top dollar for the shopping centre, which they see as a “generational investment”.

CBRE state director for Victorian retail investments Justin Dowers says it is also a record sale for a shopping centre in Australia owned by just one family.

Australia’s first Kmart store in Burwood East in 1969.

The shopping centre has an estimated net income of more than $9.5 million a year and a zero vacancy rate.

CBRE says the centre has the strongest trading Kmart and Coles combination in Australia, with the retail giants signed to 21- and 20-year leases respectively.

The popular complex also includes Coles and Aldi supermarkets, a First Choice Liquor outlet, specialty stores and a gym.

The centre has the strongest trading Kmart and Coles combination in Australia.

Wizel says he was blown away by the interest the shopping centre attracted during the sales campaign.

“Those at the pointy end of the process included Australian-based institutions as well as several private buyers who sourced their capital out of Asia,” he says.

The complex first hit the market in July and secured a sale last week during the second round of the international expressions of interest process.

This article from the Herald Sun originally appeared as “Burwood One changes hands for more than $180m”.