Private investor acquires Ferny Grove Shopping Village in off-market deal

A Melbourne-based private investor has purchased Coles-anchored Ferny Grove Shopping Village from Kerching Capital for $19.25 million.

CBRE’s Michael Hedger and Joe Tynan, brokered the off-market deal with the sale reflecting a 5.72% passing yield.

“The buyer has been actively looking in the market for over 12-months and was drawn to the significant future value-add proposition of the shopping centre and Coles’ long-term commitment to the centre,” Mr Hedger said.

The challenging construction environment, coupled with uncertainty in the debt market has kept the development pipeline for neighborhood centre’s subdued which has shifted the investors seeking new assets to established assets that offer value add, Mr Hedger added.

Located at 51 McGinn Road Ferny Grove, the 4,423sqm neighbourhood shopping centre has a well-established income profile anchored by Coles Supermarket, complemented by national retailers BWS, Domino’s Pizza, Terry White Chemist and Jett’s Fitness with the balance focused on health and food & beverage retailers.

Situated on a prime 9,098sqm corner site zoned District Centre the property benefits from a 200m frontage along McGinn Road and Archdale Road embedded in between Ferny Grove State Primary and High School.

Mr Tynan noted in Q3 2024 investment volumes were 64% below the three-year quarterly average, demonstrating a pent-up demand for supermarket-anchored neighbourhood shopping centres in well-established growing residential catchments.

“Retail assets in metro locations remain highly desirable given the significant underlying land value and diverse tenancy mix across essential services and daily need retailers. Ferny Grove ticked all the boxes as a full-service shopping centre and attractive investment opportunity,” Mr Tynan added.