A private investor has bought the Woolworths-anchored Fernvale Village shopping centre, located an hour west of Brisbane, for $35.55 million.
The non-metro neighbourhood shopping centre sold at a fully leased yield of 5.1%.
The property offered 5,824 sqm of total gross lettable area and was leased to Woolworths supermarket, The Reject Shop and 13 specialty stores.
The 2.93-hectare site included 1.15ha of vacant land, with approval for an additional 3,285 sqm of retail gross floor area.
CBRE said Fernvale Village was the only major full-line supermarket within a 20km radius.
CBRE’s Michael Hedger and Joe Tynan and the Colliers team of James Wilson and Stewart Gilchrist sold the property on behalf of a private investor.
Gilchrist said the on-market expressions of interest campaign engaged more than $450 million in value of offers from institutional and private capital, highlighting the depth of market for Queensland neighbourhood shopping centres.
“There was significant demand due to the asset’s standing as a rare core plus opportunity; an existing shopping centre anchored by a high-performing supermarket, with a turn-key development opportunity providing immediate capital value uplift,” Tynan said.
Hedger said the purchaser’s interest was driven by the growth of the catchment area, which included a proposal for an estimated 2,000-plus additional lots and significant infrastructure expenditure to service them.
Wilson said the neighbourhood shopping centre sub-sector recorded 70 basis points of yield compression in 2021, compared to the previous year, driven by growing investor demand for essential service retail investments anchored by Woolworths and Coles.
“There was $2.56 billion in value of neighbourhood shopping centres transacted in 2021, the highest level ever recorded for the sector,” Wilson said.
Convenience retail continues to attract investors far and wide, following Dexus Convenience Retail REIT’s purchase of a pair of service stations on the Sunshine Coast, Queensland for $21.25 million last week.
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.
Last December, Centuria subsidiary Primewest bought a Woolworths-anchored convenience retail centre under construction in Sydney for $41.5 million, while Charter Hall’s retail REIT bought a 49% stake in an Ampol service station portfolio for $50.5 million.
ASX-listed SCA Property Group and Singaporean sovereign wealth fund GIC teamed up in December last year to create a $750 million joint venture to invest in Australian metropolitan convenience retail centres.
Interested in the retail market? Take a look back at Australia’s biggest single retail sales in 2021.