Investor appetite for neighbourhood shopping centres remains strong following the sale of two centres in New South Wales and Queensland for more than $69 million.
The Coolum Park Shopping Centre, which was anchored by a Woolworths supermarket, in Queensland was sold in an off-market deal for $32.5 million.
In NSW, the Coles-anchored Market Plaza Chipping Norton property was sold to a private investor for $37.4 million at a yield of 4.75%.
JLL’s Nick Willis and Sam Hatcher sold the Queensland asset, while the JLL team including Dylan McEvoy ran the successful expressions of interest campaign for the NSW asset.
JLL research showed that $2.7 billion worth of neighbourhood shopping centres were traded in 2021, trading at an 81% uplift compared to the year prior.
Last year’s transaction volumes were also up 45% and 64% on the 5- and 10-year averages, respectively.
“The convenience and large format retail sectors continue to attract the strongest investor interest and highest conviction given the sectors outperformance over the past 24 months,” said JLL’s Retail Investments (Australia) Senior Director Nick Willis.
“The investor interest is broad; ranging from private high-net worth investors, global pension and sovereign funds and the A-REIT’s all looking to increase scale in what is a highly fragmented market.
“Supply of investment product remains a key issue for this part of the retail market, with demand drastically outweighing available supply.
“This imbalance will continue to drive yield compression and potential for further M&A and strategic partnerships in 2022.”
JLL’s Retail Research (Australia) Senior Director Andrew Quillfeldt said the recent spike in COVID-19 case numbers would likely to re-introduce many of the trends evident over the past two years during periods of restricted movement, resulting in increased in spending on grocery and large format retail.
Other recent retail property transactions include Stockland and AMP Capital’s disposal of the Coles Kmart Plaza Townsville centre in Townsville, Queensland to a Sydney-based investor syndicate for $47.25 million this week.
Last month, YFG Shopping Centres bought the Strathpine Centre in Brisbane for $267 million, and AMP Capital, UniSuper and Cbus Property purchased the remaining 20% of the Pacific Fair shopping centre on the Gold Coast for $336.4 million.
In Sydney, Primewest bought the Woolworths-anchored Hurstville Retail Centre under construction from Fridcorp for $41.5 million, while the AMP Capital Shopping Centre Fund acquired an additional 25 per cent stake in Sydney’s Macquarie Centre for $422.5 million.
Late last year, Greenpool Capital and Qualitas paid $132 million for the remaining 50% interest in the Gold Coast’s Runaway Bay Centre, as Vicinity Centres acquired a 50% stake in the Gold Coast’s Harbour Town outlet centre for $358 million.
2021 was a significant year for Australian retail real estate investment – check out Australia’s biggest retail property deals of 2021.