Melbourne, 4 June 2013- The University Hill Town Centre, located within the established University Hill precinct, has been sold for to a private Victorian family for $37,200,000.
Developed by MAB Corporation, the neighbourhood shopping centre - which is anchored by a full line Coles Supermarket - was offered via a public sale through CBRE Victorian Retail Investments.
Buyers were also given the option of acquiring two separate adjoining parcels totaling 16,094sqm and the purchaser took up this land offer with plans to develop or expand the centre in the near future.
The deal represented an initial yield of 7.04% including the additional land and is further evidence of the underlying return in demand from buyers seeking to acquire quality Victorian neighborhood shopping centres with a strong tenure and low exposure to discretionary spending.
CBRE Victorian Retail Investment Director Mark Wizel, who handled the sale with CBRE’s Justin Dowers, said; “The sale at University Hill follows the recent transactions of Keilor Downs Shopping Centre and Hogan’s Corner Shopping Centre and acts as further confirmation of the strong appetite for investors to acquire Victorian retail properties.”
MAB Chief operating Officer, David Hall, confirmed that the transaction had taken place and is due to settle later this month.
“The sale of the University Hill Town Centre is in line with MAB’s wider strategy to return capital back into future development,” Mr Hall said. “We are strongly committed to the ongoing success of University Hill with its thriving retail, residential and commercial hubs.”
The 7,647sqm town centre is situated on a 21,790 sqm site (excluding the additional land) in Bundoora, approximately 19 kilometres north east of the Melbourne CBD. Major tenants include a full line Coles Supermarket, Westpac, Priceline Pharmacy, Australia Post along with a Degani Café plus 23 specialty shops.
“We are in a position in the market where there are a growing amount of national retailers looking to expand and, given the lack of suitable available sites within the inner metropolitan ring of Melbourne, the additional development land at University Hill appeared to be an attractive option from a leasing perspective and this gave an overall boost to the transaction,” Mr Wizel said.
“We are noticing a substantial weight of money directed towards non-discretionary focused retail investment properties at present, including both passive assets and retail properties with development potential.”
CBRE’s Mr Dowers added; “Private investors, syndicators and, more recently, a number of institutions have emerged in 2013 with a mandate to purchase non-discretionary focused retail investments, namely neighbourhood shopping centres.”
“There is no doubt that low interest rates are bringing a larger quantum of buyers back into the market, however it is the consistent performance of the major supermarkets along with the perceived stability in non-discretionary specialty shops that is directing a lot of this interest towards retail property.”
The sale adds to the $355,000,000 of shopping centre transactions achieved to date by CBRE Victorian Retail Investments with an additional $50,000,000 of transactions expected to be announced within the next month.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.au.