Brisbane-based fund manager IJ Capital has sold the Benowa Gardens shopping centre on the Gold Coast to a local private investment group for $60.5 million, reflecting a passing yield of 4.99%.
IJ Capital acquired the Coles-anchored neighbourhood shopping centre for $40.1 million in early 2020.
The property comprised 5,856 sqm of gross floor area on a 17,660 sqm site in Benowa, about 4km west of Surfers Paradise.
In addition to the Coles supermarket, the Benowa Gardens asset had 37 specialty tenancies and a freestanding KFC restaurant.
“We recognised value-add opportunities with Benowa Gardens, consistent with the ‘core-plus’ investment objectives of the fund,” IJ Capital Director Scott Lai said.
“We immediately undertook an active management strategy including centre upgrade works and a focused leasing plan successfully addressing numerous vacancies.”
Savills’ Peter Tyson, who transacted the deal on behalf of the vendor, said convenience-based neighbourhood centres as an asset class remained incredibly popular in the market, attracting a wide range of capital sources.
“Income streams underwritten by staple everyday needs, predominately food and services, have proven resilience and are less prone to fluctuation from outside influences,” Tyson said.
“The pandemic effects, social distancing restrictions and work from home, have bolstered performance in the smaller malls.
“This underlying performance continues to drive an enormous weight of domestic and off-shore capital, both private and institutional, to target the asset class.
“Transactions on smaller malls tend to be dominated by the nimble private investor fraternity and is likely to remain the case as yields continue to compress in response to the weight of capital.”
Recent retail property deals include the Woolworths Group’s sale of the Sapphire Marketplace shopping centre in Bega, New South Wales for $54.05 million last week, representing a 6.5% capitalisation rate.
Last week, a private investor bought the Woolworths-anchored Fernvale Village shopping centre, located an hour west of Brisbane, for $35.55 million, while ASX-listed HomeCo Daily Needs REIT bought a Dan Murphy’s-anchored retail property in Geelong, Victoria for $21.5 million.
Last month, Strintzos Property Group disposed of a service station development in the Melbourne suburb of Tarneit for $19.91 million, while Singapore-based investment manager Firmus Capital sold a convenience-led shopping centre in Sydney for $37.5 million.
Interested in the retail property market? Take a look back at Australia’s biggest single retail sales in 2021.
