Buyers see appeal in Queensland shops
A series of Queensland shopping centres have changed hands at very sharp yields, reflecting the healthy demand for centres expected to stare down Amazon and continue to produce steady returns.
In the one of the largest deals, supermarket giant Coles has sold Benowa Village to a private investor for $49.5 million, with the deal struck on the sharpest initial yield ever recorded for a neighbourhood shopping centre in Queensland, at 5.08%.
The sale was brokered by JLL directors Jacob Swan and Sam Hatcher.
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Completed in 2016, Benowa Village is a fully leased centre that spans a gross lettable area of 6,318 sqm, anchored by Coles, supported by 13 specialties and two pad sites including McDonalds and Coles Express Petrol.
“Investors remain focused on the changing fundamentals in the retail sector and have shown significant interest in high quality single supermarket anchored neighbourhood centres such as Benowa Village,” Swan says.
Demand for high quality, well leased centres has driven yields to well below historical levels
“Benowa Village is another sale driven by high levels of demand for non-discretionary based shopping centres from investors,” he says.
In a similar vein, Charter Hall Retail REIT has sold two smaller centres — Springfield Fair in Queensland, which is a Coles anchored centre, and Goonellabah in northern NSW, that is anchored by Coles and Target Country — for $38 million.
The combined total sale price reflected a 10.1% premium to book value.
Charter Hall Retail chief executive Greg Chubb says the REIT is reshaping its portfolio. “Our transactions during the past 12 months demonstrate our ability to execute on our strategy of recycling capital into potential higher growth assets to build a more resilient non-discretionary retail portfolio,” he says.
Other recent sales of centres at tight yields include MarketPlace Warner, Peregian Springs, Albany Creek Square and Casuarina Village. Demand for high quality, well leased centres has driven yields to well below historical levels, Hatcher says.
This article originally appeared on www.theaustralian.com.au/property.
