Singapore-based investment manager Firmus Capital has sold a neighbourhood shopping centre in Sydney to a private investor for $37.5 million, selling for a record 3.75% yield.
The Woolworths Schofields Shopping Centre was anchored by a 4,245 sqm Woolworths supermarket and also leased to BWS, Terry White Pharmacy and a café.
Located in Sydney’s rapidly evolving northwest growth corridor, the centre occupied a 1.184-hectare site directly opposite Schofields railway station.
Harry Bui and James Wilson of Colliers negotiated the off-market sale on behalf of the vendor.
“Woolworths Schofields Shopping Centre recorded the sharpest neighbourhood shopping centre investment yield in 2021, setting a benchmark return of 3.75%,” Wilson said.
“A competitive ‘off-market’ negotiation resulted in strong interest from local and offshore investors who were attracted to the convenient centre’s high percentage of income secured by a high performing Woolworths Shopping Centre, combined with its strategic location in the rapidly growing northwest Sydney growth corridor.”
Bui said the $37.5 million price point attracted a wide range of both local and overseas investor mandates, given the long-term development upside afforded by the Sydney metropolitan site.
“It was the high net-worth investor’s first shopping centre acquisition, highlighting the new wave of private capital from Vietnam and Southeast Asia[n] countries which Colliers are engaging with to acquire essential service retail investments,” Bui said.
According to Colliers, there was $2.5 billion in neighbourhood shopping centre transactions last year, up 58% on the previous year.
The firm found that the average cap rate compressed 74 basis points over the same period as an increasing number of private and institutional investor mandates targeted essential service investments anchored by supermarkets.
The convenience retail deal follows Centuria’s acquisition of a $202 million daily needs retail precinct within a major mixed-use development in Brisbane’s West End this week.
Centuria subsidiary Primewest also bought a Woolworths-anchored retail centre under construction in Sydney from Fridcorp for $41.5 million in December 2021.
Last month, Charter Hall Retail REIT acquired a 49% stake in a portfolio of 20 Ampol fuel and convenience retail centres for $50.5 million, while SCA Property Group and GIC teamed up to create a $750 million joint venture to invest in Australian metropolitan convenience retail centres.
Other retail deals include Stockland and AMP Capital’s exit from the Coles Kmart Plaza Townsville shopping centre in Townsville, Queensland to a Sydney-based investor syndicate for $47.25 million.
In December, AMP Capital took over the Macquarie Centre in New South Wales, while partnering with UniSuper and Cbus Property to take control of Pacific Fair in Queensland in deals totalling $758.9 million.