Strong trading leads to off-market deal for Torquay Village

IP Generation has sold Torquay Village shopping centre in an off-market deal.

A shopping centre anchored by Torquay’s largest supermarket has sold in an off-market deal.

The Coles-anchored neighbourhood shopping centre Torquay Village sold for an undisclosed price.

Fitzroys director Paul Burns negotiated the off-market sale on behalf of IP Generation.

The purchaser was a Malaysian private investor with several investments in Australia.

Mr Burns said the market had been kind to the owners who have benefited from the strong demand for retail property assets particularly linked to non-discretionary spending.

IP Generation acquired the centre for $40m in 2021.

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The deal is believed to be worth around $50m.

Fully-leased, Torquay Village comprises a 4056sq m full-line Coles supermarket – the largest in the main trade area – as well as 14 specialty tenants and one ATM for a total

lettable area of 6779sq m.

The centre is on a 14,030sq m site with 260 car parks and 260m street frontage in the Torquay retail precinct.

Mr Burns said IP Generation had added significant value to Torquay Village, delivering a high-quality tenancy mix to complement a strongly performing Coles.

It has a long weighted average lease expiry (WALE) of 7.6 years by income and 8.19 years by area.

“Investors are seeking surety and so turning to defensive bricks-and-mortar assets with essential services tenants that have proven their resilience through the turbulence of the past few years,” Mr Burns said.

“The current higher interest rates clearly haven’t deterred investors from pursuing high-quality

opportunities.”

Most of the specialty tenants at Torquay Village are non-discretionary retailers, he said.

“Some specialty tenants are currently paying turnover rent, and Coles are close to their turnover threshold so rental growth is imminent. This was an attraction to the purchaser.

“Good centre management has resulted in Torquay Village trading very well, and despite the challenging economic conditions, there are no vacancies and there’s been strong demand from businesses looking to move into any available specialty shops.”

Mr Burns said Torquay Village has excellent trade prospects.

“One of the main catalysts for the turnaround in the centre was obviously Covid, but also the ongoing recognition of the gravity in the area, what’s happening in Armstrong Creek,” Mr Burns said.

“There’s a limited supply of commercial land in Torquay. It is obviously the capital and commercial capital of the Surf Coast and there’s a lot of people around.

The Surf Coast is the seventh-fastest growing LGA in Australia, according to the 2021

Census, while the recently adopted Torquay-Jan Juc Retail and Employment Land Strategy

forecasts the current circa 22,000 population of the Torquay-Jan Juc area to surge by a

further 12,000-plus residents by 2036.