Ormeau Shopping Centre Changes Hands for $34,000,000

A private investor has purchased Ormeau Marketplace in South East Queensland from regional fund manager Clarence Property for $34 million.

The 4,718sqm shopping centre is anchored by a 4,100sqm full-line Woolworths supermarket alongside a mix of six non-discretionary based retailers, with a strong representation of allied health and medical tenants.

The deal was brokered by CBRE’s Joe Tynan and Michael Hedger jointly with JLL’s Sebastian Fahey and Nick Willis, achieving a strong yield of 5.24%. Ormeau Marketplace represents one of the first single (non-portfolio) neighbourhood shopping centre transactions in Australia since the RBA began raising the cash rate in May, by 225-bps as of September.

“The quality of this asset attracted both onshore and offshore investor interest during the competitive off-market process, with the successful purchaser having a portfolio of similar assets across Australia,” Mr Tynan said.

“The sale of Ormeau Marketplace demonstrates the continued focus from groups seeking to invest in this asset class as a hedge against inflation. These neighbourhood centres, where the income is derived from non-discretionary retailers, can benefit from income growth via higher productivity and sales growth in an inflationary environment.”

Located 35km north of the Gold Coast CBD and 45km south of Brisbane, Ormeau Marketplace offers a secure income profile, with a 11.5-year WALE and 87% of the income underpinned by Woolworths on a long term 20-year lease, expiring 2035.

JLL’s Sebastian Fahey said, “The asset represents a very defensive income profile due to the limited specialty risk and the long-term leases, and is strategically positioned to capture the growing population within the northern Gold Coast corridor with the Main Trade Area to grow 21% by 2026.”

“While the increasing cost of debt has caused some uncertainty with investors, we are still experiencing strong demand for quality prime convenience-based assets in tightly held locations.”

Clarence Property has recently changed the name of its $720 million flagship fund to Clarence Property Diversified Fund (CPDF) – formerly known as the Westlawn Property Trust (WPT).

CPDF has grown its total portfolio to 48 assets with recent acquisitions including the additional 50% of The Rocket in Robina, an Australian Government asset in Port Macquarie, a Robina development site earmarked for a 5,000sqm office building and four long leased childcare centres.