Popular Brisbane neighbourhood centre sells for $11.46m
A hive of activity during SPAR Westlake’s grand opening at The Hub Westlake in May this year. Picture: Facebook/TheHubWestlake
A popular neighbourhood shopping centre in Brisbane’s southwest has sold to a private investor for $11.46m.
The Hub Westlake showed the market strength of essential services given its sale was sealed despite recently subdued commercial property sales.
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Essential services were the linchpin for the success of the centre according to the former owners. Picture: Facebook/TheHubWestlake
The shopping centre was formerly part of ASX listed firm RAM Essential Services Property Fund (ASX: REP).
RAM’s executive director Matthew Strotton was happy with the result.
“Despite an unpredictable economy and high-interest rates, investors consistently seek exposure in assets that house non-discretionary retail and healthcare. Executing this sale at book value is a pleasing result,” he said.
The deal was said to highlight the power of collective essential service retailers, with the centre anchored by SPAR and also tenanted by a dental surgery, GP clinic, pharmacy, coffee shop, swimming school and a swimming pool equipment retailer.
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All smiles at Centenary Pool Mart in The Hub Westlake during an open day in May this year. Picture; Facebook/TheHubWestlake
RAM director Doug Rapson said “the diverse revenue streams derived from both essential services retail and healthcare tenants, coupled with long-term leases, undoubtedly piqued the market’s interest”.
“The Hub boasts an 8.3-year WALE by income and has traded at a circa 6 per cent yield.
Such stable returns are attractive to investors in the current financial landscape.”
Mr Strotton said RAM was also “in advanced stages of diligence for the divestment of two more portfolio assets at a combined book value of $20m”.
Funds raised are set to help RAM’s 2024 agenda which Mr Strotton said was flagged to investors last week.
Colliers Queensland expert Harry Dever used the firm’s National Retail Middle Markets platform, led by James Wilson, to secure a high net worth Sydney based investor via an off-market expressions-of-interest campaign.
He said “metro convenience retail centres underpinned by long WALE and national covenants remain highly sought after by local and interstate private investors”.
“The centre boasts an 8.3 year WALE (by income) and has traded at a circa 6 per cent yield”.
“Investors show a particular preference for assets with long-term leases and income growth potential through rental reversion and fixed rental reviews. Inner city neighbourhood and convenience centres in close proximity to the CBD are highly sought-after due to strong underlying land value, resulting in lower yields.”
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