Nikos Property Group has acquired a half-stake in the Colonnades shopping centre in Adelaide from Perron Group for $138.2 million, achieving a yield of around 7%.
The 86,554 sqm regional shopping centre is anchored by Coles, Woolworths, Aldi, Kmart, Big W and Dan Murphy’s.
In addition, the centre supports 12,700 sqm of non-retail uses occupying more than 42% of the total gross lettable area (GLA).
The shopping centre is on a 14.3-hectare site located about 26 kilometres south of the Adelaide CBD
Nikos Property Group will co-own the property with ASX-listed Vicinity Centres, who hold the outstanding interest and manage the property.
“The opportunity to acquire a substantial shopping centre such as Colonnades that is professionally managed by Vicinity is a good opportunity for us and helps diversify our investment holdings,” Nikos Chief Executive Theo Andrianakos said.
JLL’s Nick Willis and Sam Hatcher sold the centre on behalf of Perron Group via an international expressions of interest campaign.
“The sale is a reflection of the continued theme of major capital partnering evident in the retail space as a result of the strength of the economic recovery, the stabilisation of retail valuations and an increasingly compelling investment outlook for the sector,” Willis said.
“We continue to see a significant pipeline of opportunities for capital partners to participate in the retail recovery and repositioning of shopping centres to extract additional value, with the experience of leading managers and specialists in the sector.”
Willis said South Australian retail assets were tightly held and were highly sought after given their relative scarcity and value compared to other major metropolitan markets like Sydney and Melbourne.
Colonnades shopping centre
Hatcher said they had seen investment supply remain relatively constrained in the first quarter of 2022, following one of the largest transaction quarters ever on record in Q4 21.
“The most aggressive capital continues to be focused on the convenience and large format retail sectors, however, with Colonnades and a number of pending transactions we are continuing to see investor confidence return for quality large regional assets,” Hatcher said.
Recent shopping centre sales include QIC’s sale of its half stake in the Westfield Helensvale shopping centre on the Gold Coast for $185 million last month, while Sentinel Property Group purchased the Casuarina Square shopping centre in Darwin for about $400 million earlier this year.
Retail property investment volumes reached $2.7 billion across Australia during Q1 2022, down 13% compared to the same period last year, according to Real Capital Analytics.
RCA said the retail sector had continued its recent good run in Q1 2022 despite lower levels compared to Q1 2021, with retail investment up 119% to $19.6 billion during the past 12 months.
