Controversial Brisbane shopping centre sold for $7.2m

29-39 High Street, Russell Island, sold for $7.2m.

A shopping centre owner hit with nearly $400k in fines and costs after a decade-long dispute over sewage leaks has sold up for $7.2m in one of Brisbane’s cheapest suburbs.

The property which brings in over half a million dollars in net income a year was sold for $7.2m – a $300,000 discount on the owner’s original asking price for the Queensland investor who bought it.

The Russell Island Shopping Centre had been embroiled in the sewage leak dispute for over a decade with the sale coming one year after the Planning & Environment Court of Qld gave Canaipa Developments nine months to fix the leaking sewerage system and almost six months after the Cleveland Magistrates Court found the owner guilty of 18 offences under the Environmental Protection Act 1994 and the Plumbing and Drainage Act 2018.

The shopping centre has a strong WALE of 7.3.

Listing agents Lachlan O’Keeffe and Michael Feltoe of Ray White Commercial secured the sale despite the complicated history, including ongoing lawsuits.

Mr O’Keeffe said the new owner looked past those issues.

“It was a complicated transaction because the shopping centre had issues and a very public and colourful history,” he said. “Due to its complex nature we were able to introduce the right purchaser who could understand the asset fully and proceed unconditionally on the property one week after the auction date.”

Mr Feltoe said “as the only shopping offering on Russell Island, the sale drew interest as a fully-tenanted, long leased investment with no immediate competition.”

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“It is these fundamentals that are continuing to be sought after by passive investors, who are keen to invest in secure retail offerings.”

The property has a strong tenant base with a weighted average lease expiry (WALE) of 7.3 years. The building itself is 1,943sq sitting on a 5,950sq m site with net income of $547,800 a year, anchored by IGA supermarket on a 15 year lease, with others including Australia Post, a pharmacy, two restaurants, a hairdresser and a bakery.

Russell Island has long been renowned as a bargain hunters paradise for those looking for residential land in the Qld capital region – with the cheapest on the market at present a 577sq m block for $35,000.

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