Melbourne, 13 April 2014 – The Somerville Shopping Centre in the Mornington Peninsula is set to be the first significant sale for the Victorian retail investment market in 2014.
The Coles and Target-anchored shopping centre comprises 16,520sqm of lettable space and is situated on an expansive 49,890sqm site. Both Coles and Target are on long-term leases expiring in 2023, with their stores totalling 3,722sqm and 5,176sqm respectively.
CBRE’s Mark Wizel and Justin Dowers have been appointed to sell the asset on behalf of Federation Centres via a public Expressions of Interest campaign commencing this month. The property is expected to fetch circa $40 million.
Mr Wizel said the centre was expected to attract interest from a range of buyers including high net worth private investors, syndicators, institutions and offshore groups.
“Somerville Shopping Centre represents the first sub-regional shopping centre to be offered for sale in Victoria in 2014, which highlights the overall lack of supply in this sector,” Mr Wizel said.
“The asset ticks a lot of boxes for a variety of buyer mandates in the market, given that the centre is fundamentally sound, underwritten by long term leases to Coles and Target, whilst also providing organic growth and the ability to add value.”
The last sub-regional shopping centre to be offered to the market in Victoria was the Bendigo Marketplace, which was purchased by ISPT in December 2013 for $165 million, representing a yield of 7.3%
Somerville Shopping Centre, which also includes four national mini majors and 26 specialty tenancies, benefits from a central location in the growth corridor within the Mornington Peninsula.
Mr Dowers commented: “This asset is positioned for growth, with the Mornington Peninsula population growing in line with Melbourne metropolitan averages, fuelled by the recent success of the Peninsula Link Freeway.”
The freeway has improved the livability of the Mornington Peninsula region and underpinned population growth, which is having a positive impact on retail investment assets, Mr Dowers added.
“The anticipated Port of Hastings major expansion is a bit of an X factor for the region, which would see areas like Somerville go from strength to strength.”
Mr Wizel said the sale of Somerville Shopping Centre would provide some temporary relief for the major demand/supply imbalance occurring in the retail investment market nationally.
“We have seen a shift in investor sentiment towards the sub-regional sector over the last 18 months,” Mr Wizel said.
“The assets that are drawing the most attention are those with underlying fundamentals, sustainable income levels in locations that promote future growth and with value-add potential. Centres that meet these criteria continue to be competitively pursued by predominately institutional investors, along with syndicators, funds and high net worth private families.”
For Australian/international news or global stories, follow us on Twitter.About CBRE Group, Inc.
