Woolworths offers up six shopping centres
Woolworths is looking to capitalise on investor demand for new centres by preparing for sale a six-strong portfolio worth about $200 million.
The supermarket giant has assembled the centres — four along the east coast and two in Western Australia — as part of its regular asset disposal program ahead of rolling out more centres.
But the move is also partly timed to capitalise on demand for centres among small investors who have chased yields down to about 5% on well located properties with dominant catchments. Offshore institutions are also chasing Australian retail portfolios they can package up for their clients, although some local groups that rely on domestic banks for finance have been hamstrung by lower loan-to-valuation ratios and higher margins.
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Woolworths has been an active vendor. In 2015, it seized on investor appetite for shopping centres when it carved up a $180 million portfolio of six stores across Australia.
The company sold neighbourhood stores in Victoria, Queensland, Western Australia and the Northern Territory. A year earlier it sold more than $152 million worth of new centres to two Singapore-based investment groups.
The Singapore-based investors were both clients of Rockworth Capital Partners. That group has spun off its local holdings into a new investment management company, Firmus Capital, which is chasing more local real estate.
In 2011, Woolworths sold eight retail shopping centres to a 50-50 joint venture owned by Charter Hall Retail REIT and Telstra Super for $266 million.
Woolworths is not the only seller. Coles last month said it was in the final stages of negotiation with a potential buyer of the Benowa Village Shopping Centre on the Gold Coast. The near $40 million price showed a crisp yield of 5-5.5%, industry sources said.
Rockworth in 2015 bought the Woolworths shopping centre and Masters Home Improvement store at Everton Park in Brisbane’s inner northern suburbs for more than $70 million.
In Victoria, the Gilbert family has just sold Melbourne’s Northcote Central shopping centre for $34m on a sharp yield of 3.47% via CBRE’s Mark Wizel and Justin Dowers. The yield may have been driven down by the 9205sq m site’s potential as a residential development.
This article originally appeared on www.theaustralian.com.au/property.
