The sale of the St Lucia Marketplace in Brisbane’s south west has set a new record yield for an IGA-anchored shopping centre in Queensland.
MRL Investments purchased the 3,033sqm site for $15 million from Marquette Properties, representing a building rate of $7,653/sqm and fully-leased yield of a record 5.5%.
On the corner of Hawken Drive and Boomerang Road in St Lucia, just 4km from the Brisbane CBD, the Marketplace consists of two, two-level buildings.
Brisbane’s leading IGA operator, Hopper Group, occupies 56% of the 1,960sqm gross lettable area on a 15-year lease, and is accompanied by 11 specialty tenancies reflecting a WALE of 6.17 years.
CBRE’s Joe Tynan and Michael Hedger managed a significant Expressions of Interest campaign, attracting 134 enquiries and 11 serious offers from local, interstate and offshore investors that were all within 15% of the final price.
“The level of enquiry and bidding was above average for this category of shopping centre, primarily due to its prime location and solid investment fundamentals,” Mr Tynan said.
“We are continuing to see significant yield compression for neighbourhood shopping centres that offer security through a tenancy profile of non-discretionary retailers.
“This was evidenced in our recent transactions of Woolworths Ormeau and Woolworths Logan Village, which both achieved yields under 6%.”
Mr Tynan noted that record-low interest rates continue to encourage astute investors.
“There is increasing competition from new capital in the market,” he added.
“More than 40% of enquiries came from new investors, and the acquisition represented MRL Investment’s first foray into retail.”
St Lucia is one of Brisbane’s top 10 most-affluent suburbs, and the Marketplace is 500m from the University of Queensland campus that hosts 61,600 students and teachers annually.
“Marquette is all about buying assets, making them better, and on-selling demonstrably different properties to what we bought,” said Marquette Properties Managing Director Toby Lewis.
“Our investors have enjoyed great cash flow and now a significant capital gain and we wish the new owners every success during their ownership.
“We were pleased with sale process and feel that the asset’s key benefits were well marketed by CBRE and hence led to huge enquiry levels and really strong and tight bidding.
“The IGA store is best-in-class which underpins the asset and helped with a sub-6% yield for an IGA anchored centre.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
