The Yarra Valley’s Healesville Walk Shopping Centre is set to be offered to the market, marking the third neighbourhood shopping centre to be listed for sale this year.
Located on a 1.33 hectare land parcel, the neighbourhood shopping centre is anchored by a strong trading Coles Supermarket and Liquorland, in addition to being complemented by 12 specialty shops.
CBRE Victorian Retail Investments Mark Wizel and Justin Dowers are acting exclusively for Moelis Australia Asset Management Ltdinvestment bank Moelis and Co., with the Expressions of Interest campaign kicking off officially in the middle of August.
Mr Dowers said given the limited opportunity to acquire neighbourhood shopping centres in 2016, the strong trading Coles anchored complex was expected to attract significant buyer interest from both local and offshore investors.
“Neighbourhood shopping centres are becoming more sought after in comparison to other commercial property sectors, given their high portion of income associated with non-discretionary tenants, which are benefiting from consistent population growth in the state,” Mr Dowers said.
“Victorian centres in particular continue to stregthen, with the state maintaining the highest consumer sentiment levels in the country (105.8) and the fastest economic growth rate (up by 4.3% form last year), which is driving tenant performance, and subsequently encouraging rental levels to increase.”
Healesville Walk is positioned in the heart of the Yarra Valley region, and continues to be one of the most popular tourist regions in Victoria, with both local and offshore tourists contributing to $324 million to the local economy. Within the main trade catchment, spending per capita on fresh food and other food and groceries are 2.1% and 7.7% above the metropolitan Melbourne average respectively.
“The Yarra Valley is internationally recognised as one of Australia’s leading tourism hot spots, specifically being a wine producing region. With over 744,000 domestic overnight visitors and 40,300 international overnight visitors a year, Healesville Walk continues to benefit from this influx of visitors,” Mr Dowers added.
Healesville Walk features the only full line supermarket within the catchment and is prominently situated on the main retail strip within Healesville. The 4,972sqm centre in conjunction with the prime retail strip forms a major shopping destination for the surrounding area.
Mr Wizel said the lack of available blue chip investment grade properties and historic low interest rates was driving yield compression, especially in the retail sector.
“There is also evidence that buyers are gaining more confidence in the performance of regions outside of the immediate CBD, stemming from increased population growth and retail expenditure,” Mr Wizel said.
“What this tells us is that buyers are now more desperate than ever to secure commercial property, with a ‘flight to quality’ becoming more apparent.”
Mr Wizel noted that Victoria’s neighbourhood retail sector continued to be tightly held - a factor that was expected to underpin strong interest in the sale campaign.
“We saw yields for neighbourhood shopping centres in Victoria enter into the 5% range in 2015, - the first time since prior the GFC. Based on the continued strength of the sector, and growing interest from offshore investors, we anticipate this trend to continue,” Mr Wizel explained.
During the first half of 2016, the sector has also emerged on the radar of Asian investors seeking to acquire income producing assets as opposed to being primarily focused on inner city development sites.
“We have fielded significant enquiry from Asian investors for Victorian retail investment assets in 2016, as buyers become more educated on the security these asset provide when compared to other asset classes around the country or internationally,” Mr Wizel added.
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