Sydney investor ploughs $21m into Coburg Hill purchase

A Woolworths-anchored mall in Melbourne has been snapped up by a Sydney investor for a cool $21.3 million – a deal that shows investor appetite remains strong, according to industry experts.

The APN Property Group put the 4420sqm Coburg Hill Shopping centre on the market in February this year when demand for non-discretionary retail was still high.

But despite the ensuing pandemic investors circled, attracted by the 14 years remaining on Woolworths’ 20-year lease.

The site also boasts seven specialty shops including Degani and Regency Pharmacy, with a net passing income of $1.28 million. The sale price reflected a passing yield of 6%.

Coburg Hill Shopping Centre has sold.

It follows the sale of the Woolworths-owned Keysborough South Shopping Centre, which recently sold to a local investor for $33.13 million.

With strong interest from both local and overseas buyers, CBRE’s Justin Dowers says it is clear demand remains strong in the sector.

“Investors are obviously demonstrating that they have a good appetite for this sort of stock and that should give institutional owners confidence in their sub $50m retail holdings around the country,” he says.

Dowers says yields for commercial property have softened in the post-pandemic market.

But the fact that prospective overseas buyers are showing interest is also a positive, agent Kevin Tong says.

“It is too early to say Asian investors are back but there is no doubt that the recent increase in enquiry we have had coming out of China and Hong Kong, which really only started as the COVID19 issue gained momentum, has been significant,” Tong says.

“Furthermore, the current low Australian dollar is also making it more attractive for international investors, with capital sitting in offshore accounts to invest in commercial property in Australia, which is becoming a significant factor for some of these investors.”