Investor demand for retail assets continues unabated with more than $80 million in regional shopping centres changing hands this week and another $60 million worth of properties hitting the market.
Elanor Property Fund snapped up Charter Hall’s Moranbah Fair shopping centre for $25 million, while Tasmania reported its biggest retail deal in two years when RAM Group paid $38.55 million for Mowbray Marketplace in Launceston.
Elanor Retail Property Fund managing director Glenn Willis said the group is close to announcing the purchase of another shopping centre and is in due diligence to sell Glenorchy Plaza in Hobart. Glenorchy Plaza, anchored by a Big W, is expected to fetch more than $20 million.
Elanor fund manager Michael Baliva said there is “a strong appetite to acquire neighbourhood and sub-regional shopping centres especially where there is room to add value.”
The Moranbah Fair deal was struck on a yield of 8 per cent. It houses the only supermarket in the mining town, which is about 194 kilometres from Mackay in northern Queensland
The vendor, Charter Hall, is also busy rejigging its retail portfolio, putting the Woolworths supermarket in Kerang in country Victoria on the market with hopes of about $15 million.
Savills agent Pat De Maria, who negotiated the off-market sale of Mowbray Marketplace to Brisbane-based RAM Group, said many of the retail deals this year had taken place in Queensland where there are more shopping centres because of the bigger territory.
“We’ve found over the past 12 months that transaction volumes are down – $6.5 billion compared with $7.5 billion last year,” Mr De Maria said.
“There’s been a real shortage of stock so deals and the lack of sales has driven down yields.”
Investors are looking more closely at Tasmania and other regional areas where the higher yields provide good value for money.
The 11,700-square-metre Mowbray sold on a 7.3 per cent yield.
“There’s at least 100 basis points difference in the yields in Tasmania. In Victoria the equivalent centres are selling in the 5 per cent range,” he said.
Charter Hall Retail REIT fund manager Scott Dundas said the trust had sold $157 million in transactions in the past year in its bid to “enhance the quality” of the portfolio.
“With ongoing demand for retail assets like Moranbah Fair we will continue to explore divestment opportunities,” Mr Dundas said.
The intense appetite for assets is even triggering the sale of a clutch of tired retail assets in Melbourne’s suburbs.
The Gilbert family have put the faded Aldi-anchored Northcote Central mall on the market with expectations of about $30 million. The centre sits in front of the Kmart-anchored Northcote Plaza on High Street.
And Burgundy Plaza in Heidelberg in Melbourne’s middle-ring north eastern suburbs is also up for grabs for more than $9 million.
It is on a 1000-square-metre site on the corner of Burgundy and Cape streets. While its 11 shops and two offices return $420,000 a year in rent, it is expected to sell as a landbanking opportunity for future redevelopment.
The property is down the hill from the Austin Hospital and is surrounded by new apartment buildings.
CBRE agents Mark Wizel, Lewis Tong, Nathan Mufale and Jing Jun Heng, with Miles Real Estate agents Paul Evans and Tim Mitchell, are running an expressions of interest campaign for the Commercial 1 zoned asset.