Woolworths centre snapped up for 3825m as buyers chase retail investment opportunities
Woolworths centre snapped up for $38.25m as buyers chase retail investment opportunities
| 21 July 2016
A private Asian investor has acquired the Woolworths Cornubia shopping centre in South East Queensland for $38.25m amid a wave of interest in supermarket-based investment opportunities.
CBRE’s Peter Rossi and Michael Hedger negotiated the sale of the newly developed centre, which is situated in the SEQ growth corridor between Brisbane and the Gold Coast.
Offered on behalf of Woolworths, the centre was keenly contested following an Expressions of Interest campaign which attracted bids from over 10 local and offshore buyer groups.
The buyer demand translated to a net yield on the sale of 6.0%, with the sale price reflecting $5,707per square metre.
“In the current market conditions, there has been a flight to quality for retail assets,” Mr Rossi said.
“New Coles and Woolworths centres are being well received and are achieving tight yields at or better than 6.0%. The purchasers are more often than not private investors who are capitalising on the very high deprecation benefits these assets offer, which make the income stream very tax effective.”
Woolworths Cornubia is situated 30km south-east of the Brisbane CBD and 45km north-west of the Gold Coast in one of the strongest growing population corridors in South East Queensland.
It comprises the new 5,309sqm neighbourhood shopping centre along with a 1,393sqm medical/professional centre. Woolworths is the anchor tenant, alongside 13 retail tenancies, with the adjoining complex comprising a major medical centre/pharmacy and four professional suites.
Woolworths accounts for circa 55% of the income stream.
“The secured income, supported by a diverse range of non-discretionary retailers was a key attraction as was the property’s location in a strongly growing catchment characterised by young families who are known to be high spending customers of supermarkets, convenience food offers and medical services,” Mr Hedger said.
“The buyer interest in the sale campaign highlights the continued demand for retail centres in high growth areas which offer strong investment fundamentals and lengthy WALE’s.”
The centre was acquired by an investor with existing retail interests in Brisbane.
The transaction closely follows Woolworths’ sale of another South East Queensland retail asset at Everton Park. The Woolworths and Masters centre was acquired for $70m by Singaporean real estate investment managers Rockworth Capital Partners.
The next test of the market will involve the Banyo Village neighbourhood shopping centre, which is anchored by Woolworths on a new 20-year lease.
The newly developed centre is situated in the affluent residential suburb of Banyo, 15km north-east of the Brisbane CBD.
The site was acquired from Woolworths by national building company Adco, who subsequently developed the neighbourhood centre based on a 20-year lease to the supermarket giant.
CBRE’s Joe Tynan and Justin Dowers will steer the sale campaign, with the centre offering a fully leased net annual rental of circa $2.07 million and a WALE of 15.1 years by income.
The asset is anchored by the 3,960sqm Woolworths supermarket – the only full line retail cetnre in the trade area. The balance of the centre strongly leased to a complementary mix of 13 service, food and beverage tenants.
“There has been a shortage of neighbourhood shopping centres offered formally to the market, which is underpinning demand for available opportunities,” Mr Tynan said.
“The attraction for purchasers is the opportunity to secure an annuity-style income stream, underwritten by nondiscretionary, food-based retailers,” Mr Tynan said.
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