CBRE to launch sales campaigns for $150 million in neighbourhood retail assets

As investor enquiry and demand for neighbourhood shopping centres accelerates CBRE is bringing $150 million in assets to market to capitalise on rising demand.

Campaigns are being launched for Terrace Centre in Newcastle’s northern growth corridor and the near new, Woolworths anchored Gubuda-Gordonvale Shopping Centre in Cairns, with another two Queensland-based neighbourhood shopping centre listings set to be announced by CBRE over the next month.

CBRE’s Senior National Director, Retail Middle Markets James Douglas noted, “Food service and convenience-based centres have been the most in-demand sub-sector of the retail market since COVID, given the inherent resilience, strong performance and attractive inbuilt growth these assets offer.”

These retail investment fundamentals are being underpinned by a range of factors, including limited new supply following increased construction costs.

CBRE estimates that between 2022 and 2024, neighbourhood shopping centre supply in Australia totalled 72,702sqm, down 28% on the historical 10-year annual trend of 101,113sqm.

CBRE’s Michael Hedger said, “The demand-side drivers of immigration and population growth, which is projected to be 440,000, +1.6%, for the year to June 2025, is meanwhile underpinning robust tenant performance, increasing productivity and income growth prospects.”

This positive momentum and increased investor interest in the sub-sector has spurred several major owners to consider neighbourhood shopping centre divestments.

Terrace Central is being jointly marketed by CBRE’s Mr Douglas and Savills’ Steven Lerche on behalf of Panthera Group, while Gubuda-Gordonvale in Cairns is being exclusively marketed by Michael Hedger, Joe Tynan and Danny Betros on behalf of Fabcot.

The opportunities are expected to be keenly contested by a range of buyers, including private investors, syndicators, a small number of REITs, as well as the re-engagement of institutions and offshore investors.

“Institutional capital is now exhibiting interest in assets nationally and these groups in some instances are out bidding private capital. We expect both investor pools and a number of predominately South-East Asian domiciled investor groups to underpin increasing levels of transaction activity in 2025,” Mr Douglas said.

Mr Hedger noted that there had been a significant increase in investor enquiry this year for Queensland neighbourhood opportunities.

“Greater buyer diversity and general alignment between purchaser and vendor price expectations have been key drivers. Recently competed assets are in high demand, with the secure and passive nature of returns seen as a good hedge against a potentially lower cash and bond rate environment,” Mr Hedger said. 

Terrace Central:

Raymond Terrace Central is a high performing neighbourhood centre, securely leased to an exceptionally strong trading Woolworths, complemented by 21 specialty retailers. Woolworths is the dominant supermarket in its catchment, with sales exceeding benchmarks and forecast to offer income growth in the near term.

The 7,051sqm centre is situated just off the M1 motorway on a land-rich, 17,453sqm site, providing high exposure and accessibility.

The centre is trading 20% above the Urbis benchmark on a rate per square metre basis, and features a range of inclusions, among them 12 Tesla Superchargers and the region’s only Woolworths “Direct to Boot” service.

Woolworths and BWS recently completed an internal refurbishment in 2022 and have committed to new 10-year leases to 2032, with options until 2062, securing 53% of the centre’s gross income.

Other tenants include The Reject Shop, Australia Post, a medical centre, pharmacy, and other ‘essential needs’ retailers, with non-discretionary retail representing 81% of the gross passing rent.

Expressions of Interest will close in March 2025.

Gubuda-Gordonvale Shopping Centre:

Gubuda-Gordonvale Shopping Centre is anchored by a strong trading Woolworths supermarket, which occupies 85% of the centre, with the balance income profile supported by national retailers Discount Drug Store and Dominos.

Occupying a high-profile site on the Bruce Highway the 3,880sqm centre is set to benefit from strong population growth within the immediate trade area and is the centrepiece of the Gordonvale Town Centre with neighbouring pad sites set to be occupied by heavyweight QSR operators McDonald’s and KFC that will act as significant traffic generators.

Expressions of Interest close on 6th March 2025.