Woolworths and Panthera to ring up $150m of shopping centre sales
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Investors are tipped to vie for neighbourhood shopping centres worth $150m that are being offloaded by supermarket giant Woolworths and the private Panthera Group.
Woolworths’ development unit Fabcot is selling the near new Woolworths-anchored Gubuda-Gordonvale Shopping Centre in Cairns and Panthera is selling the Terrace Centre in Newcastle’s northern growth corridor.
And two more Queensland-based neighbourhood shopping centres are also set to come up for grabs.
CBRE senior national director, retail middle markets, James Douglas said that food service and convenience-based centres had been the most in-demand sub-sector of the retail market since Covid, given the inherent resilience, strong performance and attractive in-built growth these assets offer.
These retail investment fundamentals are being underpinned by a range of factors, including limited new supply following increased construction costs.
CBRE estimates that between 2022 and 2024, neighbourhood shopping centre supply in Australia totalled just 72,702sq m, a 28 per cent fall on the ten year annual trend of 101,113sq m.
CBRE agent Michael Hedger said the demand-side drivers of immigration and population growth was underpinning robust tenant performance, increasing productivity and income growth prospects.
Terrace Central is being jointly marketed by CBRE’s Mr Douglas and Savills’ Steven Lerche on behalf of Panthera Group, while Gubuda-Gordonvale in Cairns is being handled by Mr Hedger, Joe Tynan and Danny Betros on behalf of Fabcot.
The opportunities are expected to be keenly contested by a range of buyers, including private investors, syndicators, a small number of REITs, as well as the re-engagement of institutions and offshore investors.
“Institutional capital is now exhibiting interest in assets nationally and these groups in some instances are out bidding private capital. We expect both investor pools and a number of predominantly south-east Asian domiciled investor groups to underpin increasing levels of transaction activity in 2025,” Mr Douglas said.
Mr Hedger noted that there had been a significant increase in investor inquiry this year for Queensland neighbourhood centres.
“Greater buyer diversity and general alignment between purchaser and vendor price expectations have been key drivers. Recently competed assets are in high demand, with the secure and passive nature of returns seen as a good hedge against a potentially lower cash and bond rate environment,” Mr Hedger said.
Raymond Terrace Central is a high performing neighbourhood centre, securely leased to an exceptionally strong trading Woolworths, with 21 specialty retailers. Woolworths is the dominant supermarket in its catchment, with sales exceeding benchmarks and forecast to offer income growth in the near term.
The 7,051sq m centre is situated just off the M1 motorway on a land-rich, 17,453sq m site, providing high exposure and accessibility.
Woolworths and BWS recently completed an internal refurbishment in 2022 and have committed to new 10-year leases to 2032, with options until 2062, securing 53 per cent of the centre’s gross income.
Other tenants include The Reject Shop, Australia Post, a medical centre, pharmacy, and other ‘essential needs’ retailers, with non-discretionary retail representing 81 per cent of the gross passing rent.
The Gubuda-Gordonvale Shopping Centre is anchored by a strong trading Woolworths supermarket, which occupies 85 per cent of the centre, with the balance income profile supported by national retailers Discount Drug Store and Dominos.
Occupying a high-profile site on the Bruce Highway the 3,880sq m centre is set to benefit from strong population growth within the immediate trade area and is the centrepiece of the Gordonvale Town Centre with neighbouring pad sites set to be occupied by heavyweight QSR operators McDonald’s and KFC that will act as significant traffic generators.
