Quality shopping centre assets remain popular after Singapore-based Sim Lian – Metro Capital secured the Shepparton Marketplace property in regional Victoria for $88.1 million, reflecting a 6.25% capitalisation rate.
The existing 16,535 sqm centre was the dominant sub-regional centre serving Shepparton – regional Victoria’s fifth largest city – and was anchored by Woolworths and Big W stores on leases until 2030 with further options.
CBRE’s Simon Rooney and James Douglas negotiated the off-market sale of the centre on behalf of Dexus Wholesale Property Fund.
“The level of buyer interest in the Shepparton Marketplace process demonstrates the continued depth of demand for quality sub-regional shopping centre assets, particularly centres offering value-add opportunities,” Rooney said.
“There is immediate potential to undertake a targeted remix of the centre’s speciality tenants and to enhance the casual dining offer, while the large 122,900sqm site includes 61,700sqm of vacant land, providing significant scope for future development opportunities.”
Investors were said to be attracted by the centre’s combined sales performance and income security of the major tenants Woolworths and Big W, coupled with its specialty productivity of $14,641/sqm, which was 66% above the Urbis benchmark.
Rooney said the centre was situated in an expansive, densely populated trade area with a substantial retail expenditure pool, which was forecast to grow from $1.9 billion to $3 billion by 2036.
“The centre is also set to benefit from the Shepperton Southeast Precinct Structure Plan (PSP), which proposes an additional 2,500 dwellings for the catchment area, accommodating circa 6,000 residents,” he said.
The deal follows the sales of other regional retail assets in recent months, including Quanta Investment Funds’ acquisition of the Yamanto Village in Ipswich, Queensland for $21.1m in August.
In July, Sydney-based boutique fund manager Whistle Funds Management sold the Tannum Central Shopping Centre near Gladstone in Queensland for $18.5 million at a 4.9% yield, while Woolworths Group sold a neighbourhood shopping centre in Newcastle in New South Wales to Centuria Capital Group for $60.25 million in May.