Mr Wizel said that Lakeside Square Shopping Centre represented a truly unique opportunity to purchase a newly constructed, inner metropolitan neighbourhood shopping centre which is set to benefit from the significant population growth forecasted in the region.
Opened in 2012, Lakeside Square Shopping Centre is anchored by full line Woolworths supermarket and situated within the Caridinia Shire council, one of Victoria's fastest growing regions. Located approximately 50km south east of Melbourne CBD, Pakenham forms part of Melbourne's thriving south eastern growth corridor and has emerged as a major 'mini city' for the region.
The neighborhood shopping centre is anchored by a full line Woolworths Supermarket (3,800sqm), a BWS and supported by 15 specialty retail tenancies. Long term income security and tenure is provided by the strong lease covenant to Woolworths (20 Year initial lease term) and the predominately non-discretionary based specialty retailers. Furthermore, the opportunity is complemented by two additional land parcels for future development spaning an area of approximately 2.5ha, as well as 260 at grade car spaces on title.
Mr Wizel, National Director, commented that; “There is a real opportunity here to acquire a new neighbourhood shopping centre with a state-of-the-art build, whilst also having the ability to create further value through aggressive leasing and management, in addition to flexibility for future retail development or expansion.”
State Director Justin Dowers also commented that; “Metropolitan neighbourhood shopping centres like Lakeside Square Shopping Centre are so unique and rarely offered for sale. Given the increasing demand for blue chip income producing assets we are expecting significant interest from both local and offshore investors for this opportunity.”
"We have always noticed a strong level of demand for retail investments in the growth corridors of Melbourne, with buyers recognising the forecasted growth in housing and population, leading to increased demand for retail services in the area.” Mr Dowers added.
Over the past 24 months there have been a number of shopping centre and retail investment transactions to take place in the Melbourne’s South East which highlights not only the activity but the demand for assets within the booming catchment of Victoria. Summarised below are some recent transactions:
Arena Shopping Centre
Springhill Shopping Centre
The Avenue Village Shopping Centre
Casey Central Shopping Centre
Selandra Rise Shopping Centre
“Melbourne’s south east has experienced consistent house price growth similar to metropolitan Melbourne, which also has assisted in the spending capacity of the residents and shopping centre performance in the region,” Mr Dowers said.
Mr Wizel said the lack of available blue chip investment grade properties combined with historic low interest rates was helping support continual yield compression, especially in the retail sector.
“If we look at what is happening around the world, the instability of so many political landscapes, heightened security risk in powerhouse countries and overall low growth globally, it is clear to see why prime properties in Australia continue to be snapped up on yields between 4.25% and 6%,” Mr Wizel said.
“The last two neighbourhood shopping centres to transact in the south-eastern growth corridor, being Springhill Shopping Centre and Arena Shopping Centre, both transacted to offshore Chinese investors and we are expecting this interest to continue in 2017.”
“We have seen incredible demand from what we classified as a 'chinese developer' in 2009-2014 who are now looking to recycle equity from successful projects into both metropolitan and regionally located shopping centres that provide cash flow and security,” Mr Wizel concluded.
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